Can I Self-Insure Against the Risk?

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Hypothetical Annual Premium of $4,392 1
Premium Saving at 4%
33% Tax Bracket 		Age Annual Cost of Care
5% Inflation
$4,392
52
$175,200
$8,902
53
$183,960
$13,533
54
$193,158
$18,288
55
$202,816
$23,170
56
$212,957
$28,183
57
$223,605
$33,330
58
$234,785
$38,615
59
$246,524
$44,042
60
$258,850
$49,614
61
$271,792
$55,336
62
$285,382
$61,211
63
$299,651
$67,243
64
$314,634
$73,437
65
$330,366
$79,797
66
$346,884
$86,328
67
$364,228
$93,034
68
$382,439
$99,919
69
$401,561
$106,989
70
$421,639
$114,248
71
$442,721
$121,702
72
$464,857
$129,356
73
$488,100
$137,215
74
$512,505
$145,284
75
$538,130
$153,570
76
$565,036
$162,078
77
$593,288
$170,814
78
$622,952
$179,784
79
$654,100
$188,994
80
$686,805

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 ($1,871,421.00) of exposure.

Every year in addition to the average 3 Year need will cost you an additional $686,805 per year.

1. Interest credited at the end of the year. Hypothetical premium based on $480/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