Can I Self-Insure Against the Risk?

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Hypothetical Annual Premium of $4,026 1
Premium Saving at 4%
33% Tax Bracket
Age Annual Cost of Care
5% Inflation
$4,026
52
$160,600
$8,160
53
$168,630
$12,405
54
$177,062
$16,763
55
$185,915
$21,238
56
$195,211
$25,833
57
$204,972
$30,551
58
$215,221
$35,396
59
$225,982
$40,371
60
$237,281
$45,479
61
$249,145
$50,724
62
$261,602
$56,109
63
$274,682
$61,639
64
$288,416
$67,317
65
$302,837
$73,147
66
$317,979
$79,133
67
$333,878
$85,280
68
$350,572
$91,592
69
$368,101
$98,073
70
$386,506
$104,727
71
$405,831
$111,560
72
$426,123
$118,576
73
$447,429
$125,780
74
$469,800
$133,177
75
$493,290
$140,772
76
$517,954
$148,571
77
$543,852
$156,579
78
$571,045
$164,801
79
$599,597
$173,244
80
$629,577

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 ($1,715,487.00) of exposure.

Every year in addition to the average 3 Year need will cost you an additional $629,577 per year.

1. Interest credited at the end of the year. Hypothetical premium based on $440/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