Can I Self-Insure Against the Risk?

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Hypothetical Annual Premium of $1,922 1
Premium Saving at 4%
33% Tax Bracket
Age Annual Cost of Care
3% Inflation
$1,922
52
$76,650
$3,896
53
$78,950
$5,922
54
$81,318
$8,003
55
$83,758
$10,139
56
$86,271
$12,333
57
$88,859
$14,586
58
$91,525
$16,899
59
$94,271
$19,274
60
$97,099
$21,713
61
$100,012
$24,217
62
$103,012
$26,788
63
$106,102
$29,428
64
$109,285
$32,139
65
$112,564
$34,922
66
$115,941
$37,780
67
$119,419
$40,715
68
$123,002
$43,728
69
$126,692
$46,822
70
$130,493
$49,999
71
$134,408
$53,261
72
$138,440
$56,610
73
$142,593
$60,049
74
$146,871
$63,580
75
$151,277
$67,206
76
$155,815
$70,929
77
$160,489
$74,752
78
$165,304
$78,677
79
$170,263
$82,708
80
$175,371

After 28 years of saving, you  have accumulated approximately enough money to pay for only 5.7 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 ($443,405.00) of exposure.

Every year in addition to the average 3 Year need will cost you an additional $175,371 per year.

1. Interest credited at the end of the year. Hypothetical premium based on $210/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