To Self-Insure or Not

Is self-insuring a wise investment?

Some may 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.

The first concern should be whether or not you will be insurable in the future if you should decide later to buy insurance. Insurability is determined by: application information, phone interview, and medical records review. Not every applicant qualifies.

If you have decided to self-insure it is recommended that you work with an estate and elder law attorney to make sure your assets are protected. More people are worried that the IRS will take a big chunk out of their estate than what they might pay for long term care.

                    your estate money goes.

Using Your Investments/Savings To Pay For Care

How much principal would you need to generate $6,000-$9,000 a month for care?
For every $1,000 of monthly retirement income you want to generate from your own savings, you will need about $230,000 in assets, according to the Schwab Center for Investment Research. For example, if you want $3,000 a month, or $36,000 a year, you would need savings of $690,000. That's a conservative estimate, assuming that you earn 5.2% on your investments and live off the earnings without dipping into the principal.

For a $6,000/month care cost you would need $1,380,000.
For a couple you would need $2,760,000

Got a pencil and calculator?
The average nursing home stay is 2.5 years (excludes home, assisted living, memory care).

The average nursing home cost Nationwide in 2019:

  • Semi-Private Room $8,000/month x 12 = $96,000/year
  • Private Room $7,000/month x 12 = $82,000/year

The cost of nursing home care varies by location. In New York City the cost is $12,000/month $144,000/year and Athens GA is $6,300/month $75,600/year. To find the average cost for your area you can call local care providers (

Are you protecting your

Key reasons to consider long-term care insurance, advice from Schwab Investments

  • Long-term care insurance can provide security for years to come by helping to:
  • Secure quality, affordable care
  • Preserve independence and financial freedom
  • Help provide for the rising cost of long-term care
  • Relieve family members and friends from having to provide care
  • Safeguard your assets for your spouse and other heirs
  • Help pay for expenses not covered by Medicare and Medigap

Do You Know If Are You Protecting Your Retirement?

Most long term care funds come from life savings or retirement savings.

Are you protecting your

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

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

In that situation it is 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 risk making?

Some People Just Dislike Use-It-Or-Lose It Insurance

For those who worry that they may die before they use their long term care insurance there are alternatives to use-it-or-lose-it long term care insurance. The only insurance that is guaranteed to pay is life insurance because it's the only event that is guaranteed to happen.

There are two other choices to pay for care: Annuity/LTC or Life insurance/LTC

The life insurance with a LTC rider is great for those who have an old cash-value whole or universal life policy, you use the 1035 tax-free exchange to transfer the cash value to a life insurance policy that has LTC benefits. You will not have to pay capital gains - Pension Protection Act. If you are over 59 1/2 years old in most states you can use qualified money (IRA/401k) to fund your life insurance with LTC. This might appeal those who have large retirement accounts and do not need the income. The policy will cover the RMD. See LifeLTC

The annuity/LTC is a safe way to put away money for care, if not used for care the annuity passes to your estate. These are fixed deferred annuities. The annuity/LTC requires less underwriting than traditional LTC insurance or the life/LTC products. See Annuity/LTC

The life insurance and annuity with long term care benefits do not qualify for the state Partnership asset protection program, only traditional long term care insurance qualifies. See Partnership

Get a quote.


Long Term Care is a family affair.

The majority of caregivers are family members.