Can I Self-Insure Against the Risk?

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Hypothetical Annual Premium of $1,830 1
Premium Saving at 4%
33% Tax Bracket
Age Annual Cost of Care
5% Inflation
$1,830
52
$73,000
$3,709
53
$76,650
$5,638
54
$80,482
$7,619
55
$84,506
$9,653
56
$88,731
$11,742
57
$93,168
$13,887
58
$97,826
$16,089
59
$102,717
$18,350
60
$107,853
$20,672
61
$113,246
$23,056
62
$118,908
$25,504
63
$124,853
$28,018
64
$131,096
$30,599
65
$137,651
$33,249
66
$144,534
$35,970
67
$151,761
$38,764
68
$159,349
$41,633
69
$167,316
$44,579
70
$175,682
$47,604
71
$184,466
$50,710
72
$193,689
$53,899
73
$203,373
$57,173
74
$213,542
$60,535
75
$224,219
$63,987
76
$235,430
$67,532
77
$247,202
$71,172
78
$259,562
$74,909
79
$272,540
$78,747
80
$286,167

After 28 years of saving, you  have accumulated approximately enough money to pay for only 3.3 months of care.

If you were faced with the average 3 Year Long-Term Care need2, even under the optimal saving conditions shown above, you would have ($779,754.00) of exposure.

Every year in addition to the average 3 Year need will cost you an additional $286,167 per year.

1. Interest credited at the end of the year. Hypothetical premium based on $200/Day, 100% Home Health, Three Year Benefit Period, 3% Compound Inflation Rider and 90 Day Elimination Period with Spousal & Preferred Discounts. Policies vary, consult your agent about specific plan design and premiums for your individual situation.

2. National Clearinghouse for Long-Term Care Information, "How Much Care Will You Need?" June 2012