Can I Self-Insure Against the Risk?

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Hypothetical Annual Premium of $2,105 1
Premium Saving at 4%
33% Tax Bracket
Age Annual Cost of Care
5% Inflation
$2,105
52
$83,950
$4,266
53
$88,148
$6,485
54
$92,555
$8,764
55
$97,183
$11,104
56
$102,042
$13,507
57
$107,144
$15,974
58
$112,501
$18,507
59
$118,126
$21,108
60
$124,032
$23,779
61
$130,234
$26,521
62
$136,746
$29,337
63
$143,583
$32,228
64
$150,762
$35,197
65
$158,300
$38,245
66
$166,215
$41,375
67
$174,526
$44,589
68
$183,252
$47,889
69
$192,415
$51,277
70
$202,036
$54,756
71
$212,138
$58,328
72
$222,745
$61,996
73
$233,882
$65,762
74
$245,576
$69,629
75
$257,855
$73,600
76
$270,748
$77,677
77
$284,285
$81,864
78
$298,499
$86,163
79
$313,424
$90,577
80
$329,095

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 ($896,708.00) of exposure.

Every year in addition to the average 3 Year need will cost you an additional $329,095 per year.

1. Interest credited at the end of the year. Hypothetical premium based on $230/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