Rising Claims, Growing Demand: Long-Term Care Insurance Becomes Key to Retirement Plan
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.
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.
$15 Billion and Climbing: A Safety Net in Action
While final numbers for 2024 have yet to be released, industry experts anticipate that traditional Long-Term Care Insurance policies paid over $15 billion in claims—a record amount in any one year.
That estimate builds on:
- $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 $15 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Contrary to outdated beliefs, today’s LTC Insurance benefits mostly pay for non-institutional care.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 2024
- 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.
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.
Bottom Line
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 projected 2024 benefits exceeding $15 billion, 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.