Nearly three-quarters of Canadians have no financial plan to cover long-term care costs, even as private insurance remains one of the main tools available to bridge a widening gap between public coverage and actual care expenses, according to a Leger Marketing survey commissioned by the Canadian Life and Health Insurance Association (CLHIA).
International research suggests long-term care needs are widespread in ageing populations. OECD analysis indicates that roughly one in four older adults will require some form of long-term care during their lifetime. Despite this, private long-term care insurance remains uncommon.
In Canada, long-term care is not included as an insured service under the Canada Health Act. While hospital and physician services are publicly covered, LTC is delivered through a mix of provincial, territorial, and municipal programs, with cost-sharing depending on income and care needs. OECD analysis shows Canada covers a large share of long-term care costs through public systems, though significant out-of-pocket expenses remain, depending on care intensity and income.
Private home care costs vary widely across the country, typically ranging from about $10 to $85 an hour, depending on the province, level of support required, and provider type.
Costs are expected to rise sharply as the population ages. Canadian Institute for Health Information (CIHI) data show dementia is a major driver of long-term care use and system pressure, with cases expected to increase significantly in the coming decades as the population grows older. According to Brain Institute analysis, nearly 770,000 Canadians live with dementia (as of September 2025), and prevalence is projected to increase by 66%, reaching 937,000 by 2031.
OECD research points to increasing demand for long-term care services as one of the key cost pressures facing health systems.
Despite this, private insurance uptake remains low. CLHIA research indicates that long-term care insurance markets are limited, with relatively low participation rates due to cost, eligibility requirements, and product availability. In Canada, traditional long-term care insurance can be difficult to access, with fewer providers and strict underwriting criteria, according to Ratehub.ca.
Premiums may also increase after initial guarantee periods, often around five years, adding uncertainty for policyholders in retirement. This has contributed to the development of hybrid products offered by major insurers, including Sun Life, which combine life insurance with long-term care benefits. These policies typically allow policyholders to access a portion of their death benefit early to help cover care costs.
Financial structures vary, but most Canadian LTC insurance products follow either a reimbursement model, where eligible expenses are reimbursed up to a cap, or an income model, where a fixed monthly benefit is paid for a set period once eligibility criteria are met. Benefits are generally tax-free, and coverage begins after a waiting period once a qualifying condition is confirmed.
Eligibility is typically based on an inability to perform at least two of six “activities of daily living,” such as bathing, dressing or eating, or the presence of a cognitive impairment requiring supervision.
In September, the CLHIA reported that Canada’s life and health insurers paid out a record $143.3 billion in 2024 for insurance benefits and retirement solutions – up nearly 12% over the previous year. CLHIA president and CEO Stephen Frank said at the time: “By offering benefits that go above and beyond what the public system can offer, insurers have an important role in supporting Canadians.”
Financial advisers generally recommend considering long-term care insurance between ages 45 and 60, when premiums are lower and eligibility is less likely to be affected by pre-existing health conditions.
