We had a similar situation recently. I successfully argued- with both our insurer and the Housing Benefit team- that the property was still occupied even when the occupant was in hospital because it was their home address, and it housed all their possessions. In the “real world” a renter would still need to pay rent or mortgage payments on a property if they were in hospital.
The Resident was in an NHS facility for 6+ months before being placed in a Care Home, at which points payments stopped almost immediately.