Can I Self-Insure Against the Risk?

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Hypothetical Annual Premium of $2,837 1
Premium Saving at 4%
33% Tax Bracket
Age Annual Cost of Care
5% Inflation
$2,837
52
$113,150
$5,750
53
$118,808
$8,741
54
$124,748
$11,812
55
$130,985
$14,966
56
$137,534
$18,204
57
$144,411
$21,529
58
$151,632
$24,943
59
$159,214
$28,448
60
$167,175
$32,047
61
$175,534
$35,743
62
$184,311
$39,538
63
$193,527
$43,435
64
$203,203
$47,436
65
$213,363
$51,544
66
$224,031
$55,762
67
$235,233
$60,093
68
$246,995
$64,540
69
$259,345
$69,107
70
$272,312
$73,796
71
$285,928
$78,611
72
$300,224
$83,555
73
$315,235
$88,631
74
$330,997
$93,843
75
$347,547
$99,195
76
$364,924
$104,690
77
$383,170
$110,333
78
$402,328
$116,127
79
$422,444
$122,076
80
$443,566

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 ($1,208,622.00) of exposure.

Every year in addition to the average 3 Year need will cost you an additional $443,566 per year.

1. Interest credited at the end of the year. Hypothetical premium based on $310/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