Non-invasive, non-pharmacological interventions utilizing virtual reality (VR) represent a promising approach to enhancing cognitive function in patients with degenerative cognitive disorders. Traditional “pen and paper” therapies often lack the practical engagement in everyday activities that older individuals encounter in their environment. These activities pose both cognitive and motor challenges, underscoring the necessity of understanding the outcomes of such combined interventions. This review aimed to assess the advantages of VR applications that integrate cognitive-motor tasks, simulating instrumental activities of daily living (iADLs). We systematically searched five databases–Scopus, Web of Science, Springer Link, IEEE Xplore, and PubMed, from their inception until January 31, 2023. Our review revealed that motor movements, coupled with VR-based cognitive-motor interventions, activate specific brain areas and foster improvements in general cognition, executive function, attention, and memory. VR applications that meld cognitive-motor tasks and simulate iADLs can offer significant benefits to older adults. Enhanced cognitive and motor performance can promote increased independence in daily activities, thereby contributing to improved quality of life.