Long-Term Care Insurance: Is It Worth It in 2025-2026?

Costs & Finance Published: October 10, 2026 Updated: October 10, 2026 7 min read

Key Takeaways

More than half (56%) of Americans turning 65 will need long-term care, and about 1 in 5 will need it for more than five years (2022).

The average person turning 65 will face about $120,900 in future long-term care costs. Families pay 37% out of pocket; private insurance pays only 5% (2022).

Medicare does not pay for long-term care, so most families rely on their own savings, Medicaid or private insurance.

In 2026, premiums for a qualified policy count as a medical expense up to $1,860 a year at ages 51-60, $4,960 at 61-70 and $6,200 over 70.

New in 2026: if your 401(k) or similar plan allows it, you can withdraw up to $2,600 a year to pay long-term care insurance premiums without the 10% early withdrawal penalty.

Long-term care insurance is one of the hardest money decisions in retirement planning. You pay premiums for years, maybe decades, for care you hope you will never need. And you have probably heard stories on both sides: the family whose policy covered years of care, and the couple whose premiums kept going up.

So is long-term care insurance worth it? There is no single answer, but there is a clear way to think it through. This article walks you through your real odds of needing care, what that care costs, who pays for it today, the 2026 tax rules that lower the cost of a policy, and the biggest risk to watch for before you buy.

For how policies work (benefit triggers, elimination periods, hybrid policies), see the long-term care insurance section of our guide to paying for senior care.

Your Odds of Needing Long-Term Care

The first question is whether you are likely to need care at all. A 2022 study by the Department of Health and Human Services (ASPE) estimated the risk for people turning 65 between 2021 and 2025. It counts a “need” as a disability serious enough to require help for at least 90 days.

Turning 65 (2021-2025)	Will need care	Need it 5+ years	Average years of need
Women	64%	26%	3.6
Men	49%	18%	2.5
Everyone	56%	22%	3.1

Note: “Average years of need” includes people who never need care. Among those who do, the average is 5.6 years for women and 5.1 years for men.

Two things stand out. Women face higher odds and longer care, and they also live longer: life expectancy at 65 is 21.9 years for women and 19.1 years for men. And most people who need care need it for a few years, while a smaller group needs it for many years. That smaller group faces the biggest bills.

Note: You may see a higher figure, close to 70%, in older federal materials. The 2022 HHS study is the most recent federal estimate.

What Long-Term Care Costs Today

The cost of care is what makes the risk serious. These are the national medians from the CareScout Cost of Care Survey (2025):

Type of care (2025)	Monthly	Yearly
Home care (44 hrs/week)	$6,673	$80,080
Assisted living	$6,200	$74,400
Nursing home, semi-private	$9,581	$114,975
Nursing home, private	$10,798	$129,575

Prices vary a lot by state. Check yours on our senior care costs by state page.

Who pays for it today

The same HHS study looked at who pays for all the care a person turning 65 will use over the rest of their life (2022):

Payer	Share of lifetime care costs
Medicaid	43%
Families, out of pocket	37%
Other public programs	15%
Private insurance	5%

Families carry more than a third of the cost themselves, and 14% of people will spend at least $100,000 out of pocket on care after age 65. Medicare is not on this list as a long-term payer: it does not pay for long-term care.

When Long-Term Care Insurance May Be Worth It

Insurance makes the most sense for a specific group of people. Use these questions as a guide, not a rule.

It may be worth considering if:

You have savings or a home you want to protect. Medicaid pays for long-term care only after your countable assets are spent down. In most states, an applicant can keep only a small amount, often about $2,000 for an individual.
You can afford the premium for the long run, including increases. A policy usually pays only if you keep it in force until you need care, often decades later.
You are healthy enough to qualify now. Some companies screen applicants carefully and turn down people with pre-existing health conditions, a process called medical underwriting.
You want choices about where you get care, instead of depending on the Medicaid options in your state.

It may not be the best fit if:

Your savings are modest. If paying premiums would strain your budget now, Medicaid may end up being your main payer anyway.
You have very large assets and could pay for several years of care yourself without hurting a spouse or your plans.

If you are in between, a smaller policy that covers part of the cost, or a Partnership policy (see below), can be a middle path.

What About the Price of a Policy?

Premiums depend on your age, your health, the benefits you choose and the company. There is no official national price list. Industry groups publish sample premium estimates, and you may see them quoted online, but they are only examples and are not official figures. The only reliable way to know your price is to ask several companies for quotes on the same benefits.

The Biggest Risk: Premium Increases

Long-term care insurance premiums are not guaranteed to stay the same. The California Department of Insurance, which tracks rate increases by company, warns that a rate increase is not a sign of a “bad” policy, and that a company with no increases so far may still raise its rates later.

Its practical advice: choose a premium you can afford to pay every year far into the future, and build in an extra 10 to 20 percent as a cushion against future increases.

Before you buy, ask the agent for the company’s rate increase history on similar policies. Some state insurance departments, like California’s, publish it online.

Tax Breaks That Lower the Cost in 2026

Premiums for a tax-qualified long-term care policy count as a medical expense, up to a limit that depends on your age (2026):

Your age at the end of 2026	Premiums you can count
40 or under	$500
41 to 50	$930
51 to 60	$1,860
61 to 70	$4,960
71 and over	$6,200

These amounts are per person. Keep in mind how the deduction works: you claim it as an itemized deduction on Schedule A, and only the part of your total medical expenses above 7.5% of your adjusted gross income lowers your taxes.

New for 2026: using retirement savings. Starting with distributions after December 29, 2025, a 401(k) or similar plan may let you withdraw money to pay for certified long-term care insurance without the usual 10% early withdrawal penalty. The yearly amount is limited to the smallest of: the premiums you paid, 10% of your vested balance, or $2,600 (2026). Your plan has to choose to offer this, so ask your plan administrator.

Note: Tax rules are complex. Talk with a tax professional before counting on these benefits.

Partnership Policies: Protecting Your Savings From Medicaid Spend-Down

Many states offer Long-Term Care Partnership policies. If you buy one and later use up its benefits, you can qualify for Medicaid while keeping assets equal to what the policy paid out.

For example, if a Partnership policy paid $100,000 for your nursing home or assisted living care, you could keep up to $100,000 in assets and still qualify for Medicaid in that state. Those protected assets are also shielded from Medicaid estate recovery after death.

Not every policy is a Partnership policy, and the rules depend on your state. Ask the agent directly, and check with your state’s Medicaid program for details.

How to Decide

Estimate your costs. Look up care prices in your state on our costs by state page.
Check your safety net. Learn how Medicaid works for long-term care in your state, and whether you or your spouse might qualify for VA benefits.
Get quotes on the same benefits. Compare the same daily benefit, benefit period and inflation protection across companies.
Stress-test the premium. Add 10 to 20 percent and ask yourself if you could still pay it at 75 or 80.
Ask about Partnership and tax-qualified status. Both can add real value.

For other ways to pay, including hybrid life/long-term care policies, reverse mortgages and VA Aid and Attendance, see our complete guide to paying for senior care and more articles in our costs and finance section.

Frequently Asked Questions

What are the odds I will need long-term care?

A 2022 HHS study estimated that 56% of Americans turning 65 will develop a disability serious enough to need long-term care, and 22% will need it for more than five years. Women face higher odds than men: 64% compared with 49%.

Is long-term care insurance tax deductible in 2026?

Partly. Premiums for a tax-qualified policy count as a medical expense up to an age-based limit: $1,860 for ages 51 to 60, $4,960 for ages 61 to 70 and $6,200 over 70 in 2026, per person. You must itemize, and only medical expenses above 7.5% of your adjusted gross income are deductible, according to the IRS.

Can I use my 401(k) to pay for long-term care insurance?

Starting in 2026, plans that choose to offer it can let you withdraw up to $2,600 a year (or less, depending on your premiums and balance) to pay for certified long-term care insurance without the 10% early withdrawal penalty, according to IRS Notice 2026-33. Ask your plan administrator.

Can long-term care insurance premiums go up?

Yes. Premiums are not guaranteed to stay the same. The California Department of Insurance advises building in an extra 10 to 20 percent as a cushion against future increases, and checking a company’s rate increase history before you buy.

What is a Partnership long-term care policy?

A Partnership policy is a state-approved policy that protects some of your savings if you later need Medicaid. You can keep assets equal to the benefits the policy paid, such as $100,000 for $100,000 of care, and still qualify, according to the Congressional Research Service.

Sources

U.S. Department of Health and Human Services, ASPE. “Long-Term Services and Supports for Older Americans: Risks and Financing, 2022.” Research brief, August 2022 (revised). https://aspe.hhs.gov/sites/default/files/documents/08b8b7825f7bc12d2c79261fd7641c88/ltss-risks-financing-2022.pdf. Accessed: October 2026.
CareScout (Genworth Financial). “CareScout Releases 2025 Cost of Care Survey Results.” Released: March 2, 2026. https://investor.genworth.com/news-events/press-releases/detail/1054/carescout-releases-2025-cost-of-care-survey-results. Accessed: October 2026.
Medicare.gov. “Long-Term Care Coverage.” https://www.medicare.gov/coverage/long-term-care. Accessed: October 2026.
Internal Revenue Service. “Revenue Procedure 2025-32” (2026 inflation adjustments, section 213(d)(10)). https://www.irs.gov/pub/irs-drop/rp-25-32.pdf. Accessed: October 2026.
Internal Revenue Service. “Notice 2026-33: Guidance on Qualified Long-Term Care Distributions.” https://www.irs.gov/pub/irs-drop/n-26-33.pdf. Accessed: October 2026.
Internal Revenue Service. “Publication 502 (2025), Medical and Dental Expenses.” https://www.irs.gov/publications/p502. Accessed: October 2026.
Congressional Research Service. “Long-Term Services and Supports: History of Federal Policy and Programs” (R47881). December 20, 2023. https://www.congress.gov/crs_external_products/R/PDF/R47881/R47881.2.pdf. Accessed: October 2026.
California Department of Insurance. “Long Term Care Insurance Rate History.” https://www.insurance.ca.gov/01-consumers/105-type/95-guides/05-health/01-ltc/rate-history.cfm. Accessed: October 2026.