Can I Self-Insure Against the Risk?

Change Profile

 

Hypothetical Annual Premium of $1,830 1
Premium Saving at 4%
33% Tax Bracket
Age Annual Cost of Care
3% Inflation
$1,830
52
$73,000
$3,709
53
$75,190
$5,638
54
$77,446
$7,619
55
$79,769
$9,653
56
$82,162
$11,742
57
$84,627
$13,887
58
$87,166
$16,089
59
$89,781
$18,350
60
$92,474
$20,672
61
$95,248
$23,056
62
$98,105
$25,504
63
$101,048
$28,018
64
$104,079
$30,599
65
$107,201
$33,249
66
$110,417
$35,970
67
$113,730
$38,764
68
$117,142
$41,633
69
$120,656
$44,579
70
$124,276
$47,604
71
$128,004
$50,710
72
$131,844
$53,899
73
$135,799
$57,173
74
$139,873
$60,535
75
$144,069
$63,987
76
$148,391
$67,532
77
$152,843
$71,172
78
$157,428
$74,909
79
$162,151
$78,747
80
$167,016

After 28 years of saving, you  have accumulated approximately enough money to pay for only 5.7 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 ($422,301.00) of exposure.

Every year in addition to the average 3 Year need will cost you an additional $167,016 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