Can I Self-Insure Against the Risk?

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Hypothetical Annual Premium of $2,562 1
Premium Saving at 4%
33% Tax Bracket
Age Annual Cost of Care
5% Inflation
$2,562
52
$102,200
$5,193
53
$107,310
$7,894
54
$112,676
$10,668
55
$118,310
$13,516
56
$124,226
$16,440
57
$130,437
$19,443
58
$136,959
$22,526
59
$143,807
$25,692
60
$150,997
$28,943
61
$158,547
$32,281
62
$166,474
$35,708
63
$174,798
$39,227
64
$183,538
$42,840
65
$192,715
$46,550
66
$202,351
$50,360
67
$212,469
$54,272
68
$223,092
$58,288
69
$234,247
$62,412
70
$245,959
$66,647
71
$258,257
$70,995
72
$271,170
$75,460
73
$284,728
$80,044
74
$298,964
$84,751
75
$313,912
$89,584
76
$329,608
$94,547
77
$346,088
$99,643
78
$363,392
$104,875
79
$381,562
$110,248
80
$400,640

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 ($1,091,672.00) of exposure.

Every year in addition to the average 3 Year need will cost you an additional $400,640 per year.

1. Interest credited at the end of the year. Hypothetical premium based on $280/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