This study delves into the relationship between long-term care insurance (LTCI) and household consumption patterns among older adults in China, utilizing data from the China Health and Retirement Longitudinal Study (CHARLS) and cities with LTCI implementation, covering 6,494 households with individuals aged 60 and above. Employing difference-in-differences (DID) models, the research reveals that LTCI significantly influences both total and per capita consumption, particularly enhancing enjoyable consumption types. Notably, the impact of LTCI varies, showing pronounced benefits on total and enjoyable consumption for urban households, while also fostering comprehensive consumption improvements in rural and disabled older households. These findings underscore LTCI’s vital role in bolstering financial security and well-being for the elderly, offering significant policy insights for addressing aging population challenges.