Can I Self-Insure Long Term?

Peter just turned 57 and is researching long-term care insurance. At what point can he self-insure and avoid having a policy?

QUESTION: Peter in Maui just turned 57 and is researching long-term care insurance. At what point can he self-insure and avoid having a policy?

ANSWER: Mathematically, the answer would be if you can support yourself in a nursing home for 25 years in a worst-case scenario, and your wife still has enough after you die. That’s a lot of money. It’s a large enough bill that I’m looking at transferring that risk most of the time.

If you call me up and you have $20 million liquid, and you want to self-insure through a potential expense of $2 million to $3 million over many years, you can certainly afford to do that at that point. For most people, that number is not going to be there for them. It’s several thousand dollars a year, but it is worth it.

Every day after you turn 60 years old, your chances of spending some time in a nursing home are there. I recommend that virtually everyone get long-term care insurance when they turn 60.

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