Can I Self-Insure Against the Risk?

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Hypothetical Annual Premium of $2,288 1
Premium Saving at 4%
33% Tax Bracket
Age Annual Cost of Care
5% Inflation
$2,288
52
$91,250
$4,637
53
$95,812
$7,049
54
$100,603
$9,526
55
$105,633
$12,069
56
$110,915
$14,680
57
$116,461
$17,361
58
$122,284
$20,114
59
$128,398
$22,941
60
$134,818
$25,844
61
$141,559
$28,825
62
$148,637
$31,886
63
$156,069
$35,029
64
$163,872
$38,256
65
$172,066
$41,569
66
$180,669
$44,971
67
$189,702
$48,464
68
$199,187
$52,051
69
$209,146
$55,734
70
$219,603
$59,516
71
$230,583
$63,399
72
$242,112
$67,386
73
$254,218
$71,480
74
$266,929
$75,684
75
$280,275
$80,000
76
$294,289
$84,432
77
$309,003
$88,983
78
$324,453
$93,656
79
$340,676
$98,454
80
$357,710

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 ($974,676.00) of exposure.

Every year in addition to the average 3 Year need will cost you an additional $357,710 per year.

1. Interest credited at the end of the year. Hypothetical premium based on $250/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