Is self-insuring a wise investment?

Some believe they can afford to self-insure, but even those with significant assets could erode their savings very quickly should they need long term care. You have a choice today but you may not once your health changes and every day without a policy you are choosing to self-insure.

When you pull into a parking space do you put money in the parking meter? Why? You can afford to self-insure for $50. When you put the money in the meter you're buying insurance -- paying a smaller amount to offset the risk of having to pay a larger amount.

Is this how you want your
estate/life savings to be used?

The truth is that anyone with assets would prefer to leave their estate to family, friends or a charity instead of giving it to a nursing home or the government. (See Lifetime Asset Protection with The California Partnership)

Just consider the following example. If you save $1,500 per year and obtains a 7% rate of return annually over 30 years, that money grows to just $142,000. But if you were to buy a long term care policy that also costs $1,500 per year the policy benefit maximum could grow to $889,000.14

Like the chart above this shows how much liability you would still have if you saved your premium of $1,895 each year in relation to the cost of care.

Saving Premiums to Self-Insure
Hypothetical Premium of $1,895.00
Premium Savings at 8%
31% Tax Bracket
Age Annual Cost of Care
5% Inflation
$1,895.00 59 $43,800.00
$3,999.00 60 $45,990.00
$6,219.00 61 $48,290.00
$8,562.00 62 $50,704.00
$11,034.00 63 $53,239.00
$13,643.00 64 $55,901.00
$16,396.00 65 $58,696.00
$19,301.00 66 $61,631.00
$22,366.00 67 $64,713.00
$25,600.00 68 $67,949.00
$29,013.00 69 $71,346.00
$32,614.00 70 $74,913.00
$36,414.00 71 $78,659.00
$40,424.00 72 $82,592.00
$44,655.00 73 $86,722.00
$49,120.00 74 $91,058.00
$53,831.00 75 $95,611.00
$58,802.00 76 $100,392.00
$64,047.00 77 $105,412.00
$69,582.00 78 $110,683.00
$75,423.00 79 $116,217.00
$81,586.00 80 $122,028.00
After 22 years of saving, you have accumulated approximately enough money to pay for 8 months of care.

If you were faced with the average 3.1 Year Long Term Care stay, even under the optimal saving conditions shown above, you would have $309,110.90 of exposure.

Every year in addition to the average 3.1 Year Stay will cost you an additional $128,129.00/Per Year.

Are You Really Protecting Your Retirement?

Most long term care patients and their families paid for the cost of care out-of-pocket. It is most likely that the money came from their life savings, their retirement savings or portfolios.

Protection Method
home homeowner's insurance
car car insurance
family life and health insurance
wealth life insurance
income disability insurance
retirement assets, retirement income what protects this?

Can you think of anything other than the cost of long term care
that could deplete your lifetime savings, retirement income, or portfolio?

Few People Will Take Action

As with most everything in life there is a great resistance to change, staying with a known provides the illusion of security and safety compared to change or the unknown.

If you need to think about whether or not to insure you're really asking "Will I ever need long term care?"

But that question will only be answered when either you die without needing care or when you need long term care.

If you needed long term care tomorrow, what would be the consequences to those around you?

It's the consequences that matter, not the money. Once someone needs care money no longer becomes an issue. Once someone needs care no amount of money can buy insurance. Their decision to self-insure will prove to be right or wrong.

Would it have been a mistake to insure for Long Term Care?
1. You Insure for LTC You Need LTC No Mistake
2. You Don't Insure for LTC You Don't Need LTC No Mistake
3. You Insure for LTC You Don't Need LTC Yes Mistake
4. You Don't Insure for LTC You Need LTC Yes Mistake

Which mistake would you rather make?

Some People Just Hate Insurance

For those who cannot sleep at night knowing that they may die before they use their long term care insurance there are alternatives to no cash-value long term care insurance. One is a whole life or universal life insurance policy with a long term care rider, this is great for those who already have a whole life policy, they can roll it over to one that has LTC (call us about this).

Another alternative to insurance, in fact you could consider it free long term care insurance, is an annuity with long term care benefits and the best part is there is no underwriting. Get more information here Annuity With LTC or call toll free 1-888-582-2464 or email us if you have any questions about funding your long term care with annuities.

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