Can I Self-Insure Against the Risk?

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Hypothetical Annual Premium of $2,654 1
Premium Saving at 4%
33% Tax Bracket
Age Annual Cost of Care
5% Inflation
$2,654
52
$105,850
$5,379
53
$111,142
$8,177
54
$116,699
$11,050
55
$122,534
$14,000
56
$128,661
$17,029
57
$135,094
$20,139
58
$141,849
$23,333
59
$148,941
$26,612
60
$156,388
$29,979
61
$164,207
$33,436
62
$172,417
$36,986
63
$181,038
$40,631
64
$190,090
$44,374
65
$199,594
$48,217
66
$209,574
$52,163
67
$220,053
$56,215
68
$231,056
$60,376
69
$242,609
$64,648
70
$254,739
$69,035
71
$267,476
$73,539
72
$280,850
$78,164
73
$294,892
$82,913
74
$309,637
$87,789
75
$325,119
$92,796
76
$341,375
$97,937
77
$358,444
$103,216
78
$376,366
$108,636
79
$395,184
$114,201
80
$414,943

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 ($1,130,628.00) of exposure.

Every year in addition to the average 3 Year need will cost you an additional $414,943 per year.

1. Interest credited at the end of the year. Hypothetical premium based on $290/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