Can I Self-Insure Against the Risk?

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Hypothetical Annual Premium of $3,386 1
Premium Saving at 4%
33% Tax Bracket
Age Annual Cost of Care
5% Inflation
$3,386
52
$135,050
$6,863
53
$141,802
$10,433
54
$148,892
$14,099
55
$156,337
$17,863
56
$164,154
$21,728
57
$172,362
$25,696
58
$180,980
$29,771
59
$190,029
$33,955
60
$199,530
$38,251
61
$209,506
$42,662
62
$219,981
$47,191
63
$230,980
$51,842
64
$242,529
$56,617
65
$254,655
$61,520
66
$267,388
$66,555
67
$280,757
$71,725
68
$294,795
$77,033
69
$309,535
$82,483
70
$325,012
$88,080
71
$341,263
$93,827
72
$358,326
$99,728
73
$376,242
$105,787
74
$395,054
$112,008
75
$414,807
$118,396
76
$435,547
$124,955
77
$457,324
$131,690
78
$480,190
$138,605
79
$504,200
$145,706
80
$529,410

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 ($1,442,524.00) of exposure.

Every year in addition to the average 3 Year need will cost you an additional $529,410 per year.

1. Interest credited at the end of the year. Hypothetical premium based on $370/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