Cost vs Benefits

Assume LTC $1800 Annual Premium and Investing the $1800 rather than buying the LTC insurance  - 8% rate of return

Assumes 1 year of Long Term Care Benefits = $73,000 ($200/day)

Assumes the following rates of inflation:

Accumulated Savings

8%

7%

6%

5%

Cost of 1 Year of Long Term Nursing Home Care

5 years

$11,405

$107,237

$102,419

$97,674

$93,294

10 years

$28,162

$157,607

$143,591

$130,743

$118,917

15 years

$52,784

$231,556

$201,407

$174,981

$151,767

20 years

$88,961

$340,253

$282,510

$234,111

$193,669

25 years

$142,118

$499,904

$396,171

$313,316

$247,178

30 years

$220,223

$734,599

$555,676

$419,239

$315,506

35 years

$334,984

$1,079,305

$779,421

$561,297

$402,668

40 years

$503,606

$1,585,925

$1,093,102

$750,878

$513,920

Examples:

Assumptions: $1800/year set aside at an 8% return
$73,000 initial Long Term Care annual benefit with 5% Inflation rate

Age 40

Age 55

Age 60

Time-Frame:

35 years

20 Years

15 years

Accumulated Savings:

$334,984

$88,691

$52,784

1 Year of Long Term Care:

$402,668

$193,669

$151,767

Shortage:

-$67,704

-$104,708

-$98,983

$1800 Annual Premium would purchase the following LTC plan at the above ages:
(with a 90-day Elimination Period and 5% Compounding, Spousal and Preferred Discounts)

Monthly Benefit:

$6,200

$5,400

$4,400

Daily Benefit:

$204

$178

$145

Benefit Period:

6 years

3 years

3 years

Custodial Care (such as nurses' aides) at home costs an average of $18/hour = that's $72 for just 4 hours
Professional Nursing Care is almost double at $31/hour.  
Adult Day Care Centers range from $40- $80 per day.