Can I Self-Insure Against the Risk?

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Hypothetical Annual Premium of $66,339 1
Premium Saving at 4%
33% Tax Bracket
Age Annual Cost of Care
5% Inflation
$66,339
52
$2,646,250
$134,456
53
$2,778,562
$204,398
54
$2,917,490
$276,215
55
$3,063,364
$349,957
56
$3,216,532
$425,675
57
$3,377,359
$503,422
58
$3,546,227
$583,253
59
$3,723,538
$665,223
60
$3,909,715
$749,390
61
$4,105,201
$835,813
62
$4,310,461
$924,552
63
$4,525,984
$1,015,669
64
$4,752,283
$1,109,228
65
$4,989,897
$1,205,294
66
$5,239,392
$1,303,935
67
$5,501,362
$1,405,219
68
$5,776,430
$1,509,218
69
$6,065,252
$1,616,004
70
$6,368,515
$1,725,652
71
$6,686,941
$1,838,238
72
$7,021,288
$1,953,842
73
$7,372,352
$2,072,544
74
$7,740,970
$2,194,427
75
$8,128,018
$2,319,577
76
$8,534,419
$2,448,081
77
$8,961,140
$2,580,029
78
$9,409,197
$2,715,513
79
$9,879,657
$2,854,628
80
$10,373,640

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 ($28,266,292.00) of exposure.

Every year in addition to the average 3 Year need will cost you an additional $10,373,640 per year.

1. Interest credited at the end of the year. Hypothetical premium based on $7,250/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