What Happens to Long-Term Care Insurance in an Illinois Gray Divorce?

 Posted on April 10, 2026 in Asset Division

Many couples buy long-term care insurance together, often in their 50s, when the premiums are lower. The policy becomes part of the financial plan they build over a long marriage. When that marriage ends, most people never stop to ask what happens to that coverage.

Long-term care insurance is one of the most forgotten assets in a gray divorce, yet it can be one of the most important. For couples divorcing in 2026, knowing how these policies are handled in a settlement can protect their security for years to come. If you are not sure where to start, our experienced Wheaton, IL gray divorce attorneys can make sure this coverage is not left out of your case.

Does Illinois Divorce Law Consider Long-Term Care Insurance a Marital Asset?

A long-term care insurance policy bought during the marriage may be treated as marital property or as a marital financial interest under 750 ILCS 5/503, depending on the policy and how it was paid for. However, unlike a bank account or retirement plan, a long-term care policy may have little or no cash value to divide, so the court usually has to look closely at the policy’s actual terms before deciding how to account for it.

Long-term care policies work differently from a bank account or retirement fund. They are individual contracts issued to one named person. In most cases, they cannot be split in two or signed over to someone else. In practice, this means one spouse keeps the existing policy, and the other has to find new coverage on their own, at today's much higher rates.

What Financial Risks Does the Spouse Without a Policy Face After a Gray Divorce?

Losing a long-term care policy in a divorce is not just a minor problem. It can cause serious money trouble later in life. According to the Administration for Community Living, someone turning 65 today has nearly a 70 percent chance of needing some form of long-term care. For a person in their 60s shopping for a new policy after a divorce, yearly premiums can cost thousands of dollars more than they would have years earlier. Some people may be turned down for coverage because of health issues that came up during the marriage. This is why it is so important to talk about long-term care insurance during divorce negotiations, not after everything has already been signed.

How Can Long-Term Care Insurance Be Included in an Illinois Divorce Settlement?

When one spouse keeps the long-term care policy, a court may count its value as an asset. The other spouse may then receive more of something else to make things fair. To do this, someone has to figure out what the policy is worth. That can mean looking at the total premiums paid during the marriage, what a similar policy costs to buy today, or the benefit amount the policy would pay out.

Illinois courts can also use spousal maintenance, financial support paid from one spouse to the other after divorce, to help cover the cost of new coverage. If one spouse is left without a policy and does not have much income, a judge may take the cost of new coverage into account when setting a support amount. This is not a sure thing, but it is a point a skilled gray divorce lawyer can raise. Spouses can also agree on how to handle long-term care costs in a written settlement, rather than leaving that choice to a judge.

What Should You Do If You and Your Spouse Have a Joint Long-Term Care Policy During Divorce?

Some insurance companies offer joint long-term care policies that let couples share a combined pool of benefits. If you and your spouse have one of these policies, your divorce may give you the right to split it into two separate policies. Not every insurer allows this, and the rules depend on your specific plan. It is important to look at your policy with your attorney early on, because some of these options have deadlines. If you miss them, you cannot go back.

Schedule a Free Consultation with a Wheaton, IL Gray Divorce Attorney

Long-term care coverage is too important to leave out of a divorce settlement. If you are planning to divorce later in life and want to make sure every asset is properly counted, the attorneys at Divorce Over 50 - Goostree Law Group are ready to help. Call 630-634-5050 to schedule a free consultation with our DuPage County gray divorce lawyers today.