You probably don’t wake up thinking about long-term care—but it’s something that can upend your life overnight. A fall. A diagnosis. A parent’s sudden decline. When that moment comes, the question becomes: How will we pay for this—and who’s going to help?

For hundreds of thousands of families, the answer is Long-Term Care Insurance.

In 2024, total benefits paid by traditional LTC Insurance policies are expected to exceed $15 billion, according to an analysis by LTC News, continuing a sharp upward trend that reflects not only America’s aging population but also the growing cost—and complexity—of care. The offical data showed that happened. The 2025 AHIP State-to-State Long-Term Care Insurance Report showed that Insurers paid $16.8 billion in benefits in 2024 alone.

There are still people who think long-term care is just about nursing homes, but the reality is far different.

Today, most LTC Insurance policyholders utilize their benefits for home care or assisted living—prioritizing personal independence, protecting assets, while sparing their families from the burdens of intensive caregiving.

$16 Billion and Climbing: A Safety Net in Action

The official numbers from AHIP showed the massive amount of money paid to LTC Insurance policyholders. The $16.8 billion in tax-free benefits helped many families access quality long-term care services for a loved one, even in-home care.

These numbers show a building story on teh benefits of Long-Term Care Insurance.

• $14.1 billion paid in 2023 (up from $13.25 billion in 2022)
• A consistent 5%–7% annual increase in payouts over the last several years

The surge in claims is no surprise. Millions of policyholders who purchased coverage in the 1990s and 2000s are now in their 80s—when long-term care needs typically peak.

“The 2024 number is significant,” said Mary Ann DeKing, a nationally recognized Long-Term Care Insurance specialist.

That’s $16.8 billion that didn’t come out of families’ retirement accounts or force adult children to leave work and become caregivers.

Real Benefits, Real Care: Most at Home or in Assisted Living

Contrary to outdated beliefs, today’s LTC Insurance benefits mostly pay for non-institutional care.

According to a published analysis, the majority of LTC Insurance claims go toward:

• Home health aides and personal care attendants
• Assisted living community expenses
• Memory care services
• Adult day care and respite care
• Nursing facility care, when needed

This flexibility helps families keep aging loved ones where they’re most comfortable—at home.

Linda Weyer became a Long-Term Care Insurance specialist after caring for her mother. She says most people want to protect their retirement savings and stay in their own home as long as possible—but they also want the option of a quality assisted living facility if it becomes necessary.

When I talk to people, one thing I hear all the time is that they want to stay in their own home as they get older—without putting the weight of caregiving on their family. But, they want choice and control as well.

The LTC News Cost of Care Calculator shows just how costly long-term care services can be:

• Home health aide: $5,524/month nationally in 2025
• Assisted living: $4,874/month average (before surcharges)
• Private nursing home room: $10,540/month

The cost of long-term care services varies depending on where you live and the type of services required.

For example, the cost of memory care continues to climb, according to a nationwide survey of long-term care costs from LTC News.

Monthly expenses vary significantly by region — and these figures do not include common surcharges that can increase the cost up to $2000 a month or more.

 

Note: These projections are before surcharges, which can significantly increase total monthly costs depending on the level of assistance required.

Without LTC Insurance, these costs add up fast—forcing many to sell investments, draw down 401(k)s, or rely on adult children to step in.

More Adults Under 60 Are Planning Ahead

As awareness grows, more people in their 40s and 50s are buying LTC Insurance as part of their broader retirement strategy. This shift is driven by:

• Rising care costs that could derail retirement savings
• The emotional toll of caregiving witnessed during the pandemic
• A desire to stay in control of future care choices
• The financial advantage of applying while still in good health

LTC Insurance policies are medically underwritten, meaning you can’t wait until you need care. Premiums are lower, and eligibility is higher for those between the ages of 47 and 67.

“LTC Insurance is one of the few tools that gives you tax-free, guaranteed access to quality care,” DeKing said.

And it protects your lifestyle, not just your assets.

What About Hybrid and Other Policies? A Data Gap Remains

While traditional LTC Insurance is the only product with verified annual reporting, many other insurance products now offer partial long-term care benefits—but with limited or no national claims data available.

These include:

• Linked-benefit (hybrid) policies: Combine life insurance or annuities with a federally qualified LTC rider. These products are growing in popularity, but claims data are not tracked the same way as stand-alone LTC policies. Most payouts are counted as life insurance distributions and are not included in industry-wide LTC Insurance claims reports.
• Short-term care insurance: Offers up to 12 months of benefits, often to individuals who don’t qualify for traditional LTC Insurance. These policies are regulated at the state level, and no centralized data exists on total claims paid.
• Chronic illness riders: Life insurance riders that allow early access to the death benefit due to cognitive decline or physical limitations. However, most are not federally tax-qualified LTC benefits, and payouts vary widely by carrier and policy design.

What Are Long-Term Care Insurance Regulations? How Do They Protect Policyholders?

While there are products that can be helpful, only traditional LTC Insurance provides consistent, regulated, and trackable long-term care benefits—along with access to consumer protections, inflation options, and eligibility for Partnership program asset protection in many states.

You Can't Buy LTC Insurance When You Need It

The biggest mistake people make? Waiting too long. You must apply before significant health issues arise. Conditions like diabetes, heart disease, or even a past stroke can limit options or result in higher premiums—or outright denial.

• What is Underwriting in Long-Term Care Insurance?

That’s why early planning matters.

To make the process easier:

• Use the LTC News Cost of Care Calculator to understand costs in your area.
• Search the LTC News Caregiver Directory to evaluate qualified care providers.
• Speak with an LTC Insurance specialist who can compare coverage from top-rated insurers and tailor a plan to your health, budget, and goals.

10 Quick Facts About Long-Term Care Insurance

• Long-Term Care Insurance helps cover services not paid for by Medicare.
• Most claims begin after age 80.
• Many policies pay benefits for home care, assisted living, and nursing homes.
• Insurers paid about $16.8 billion in benefits in 2024.
• Care costs vary widely depending on location and level of care.
• Most people prefer receiving care at home first.
• Policies provide tax-free benefits when used for qualified care.
• Buying coverage earlier usually lowers premiums.
• Long-term care planning protects retirement savings.
• Family caregivers still provide the majority of care in the U.S.

As more Americans age and care costs accelerate, Long-Term Care Insurance remains one of the only tools that helps families afford quality care, maintain independence, and avoid burdening loved ones.

With $16.8 billion in Long-Term Care Insurance benefits paid in one year, and more adults under 60 planning ahead, LTC Insurance is smart, forward-thinking protection for you and your family as you are building a secure retirement. 

Frequently Asked Questions About Long-Term Care Insurance and Retirement Planning

Why is Long-Term Care Insurance becoming an important part of retirement planning?

Long-Term Care Insurance is increasingly viewed as a core retirement planning tool because it helps protect savings from the high cost of extended care services such as home care, assisted living, or nursing home care. As Americans live longer and need more support in later years, many financial planners now recommend including long-term care coverage as part of a comprehensive retirement strategy.

How much are insurers paying in Long-Term Care Insurance claims?

Benefits paid by insurers have risen sharply as more policyholders reach the ages when care is most likely needed. Industry data show that Long-Term Care Insurance policies paid about $16.8 billion in benefits in 2024, continuing a trend as more policies pay benefits, reflecting the growing demand for care services and the aging population.

At what age do most long-term care claims begin?

Most long-term care claims begin after age 80, according to industry data, although more younger people are receiving benefits as advances in medical science continue. While some individuals require care earlier due to illness, accidents, or cognitive impairment, the majority of claims occur in the later stages of life when chronic health conditions become more common.

Does Medicare pay for long-term care?

No. Medicare primarily covers short-term skilled care, such as rehabilitation after hospitalization, and only for a limited period. It generally does not cover ongoing assistance with daily activities like bathing, dressing, or supervision due to dementia—services that fall under long-term care.

What types of care can Long-Term Care Insurance cover?

Most policies cover several types of extended care, including:

• In-home care and personal care services
• Assisted living communities
• Memory care for dementia or Alzheimer’s disease
• Adult day care programs
• Skilled nursing facilities

Many claims begin with care at home, allowing older adults to remain independent longer.

Why are long-term care costs rising?

Several factors are driving higher long-term care costs:

• An aging population, especially Baby Boomers
• Labor shortages among caregivers
• Higher wages and healthcare expenses
• Increased demand for home-based care services

These trends are expected to continue as millions of Americans enter retirement in the coming decades.

When is the best time to buy Long-Term Care Insurance?

Most experts recommend exploring coverage between ages 47 and 67. Buying earlier typically results in lower premiums and improves the chances of qualifying medically before health conditions develop.

What happens if you don’t plan for long-term care?

Without planning, families often face difficult financial and caregiving decisions. Many people end up paying for care out of pocket or relying on unpaid family caregivers, which can create emotional and financial strain for spouses and adult children.

Can Long-Term Care Insurance help protect retirement savings?

Yes. A policy provides tax-free benefits that can pay for extended care services, helping protect retirement income, savings, and other assets that might otherwise be spent on care costs.

How do you estimate the cost of long-term care where you live?

Costs vary widely by location and the type of care needed. Tools like the LTC News Cost of Care Calculator and Caregiver Directory help families estimate local care costs and compare providers when planning for future care needs.