Can I Self-Insure Against the Risk?

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Hypothetical Annual Premium of $2,471 1
Premium Saving at 4%
33% Tax Bracket 		Age Annual Cost of Care
5% Inflation
$2,471
52
$98,550
$5,008
53
$103,478
$7,613
54
$108,652
$10,288
55
$114,085
$13,035
56
$119,789
$15,855
57
$125,778
$18,751
58
$132,067
$21,725
59
$138,670
$24,778
60
$145,604
$27,913
61
$152,884
$31,132
62
$160,528
$34,437
63
$168,554
$37,831
64
$176,982
$41,316
65
$185,831
$44,894
66
$195,123
$48,568
67
$204,879
$52,341
68
$215,123
$56,215
69
$225,879
$60,193
70
$237,173
$64,277
71
$249,032
$68,471
72
$261,484
$72,777
73
$274,558
$77,198
74
$288,286
$81,738
75
$302,700
$86,400
76
$317,835
$91,187
77
$333,727
$96,102
78
$350,413
$101,149
79
$367,934
$106,331
80
$386,331

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 ($1,052,662.00) of exposure.

Every year in addition to the average 3 Year need will cost you an additional $386,331 per year.

1. Interest credited at the end of the year. Hypothetical premium based on $270/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