Should I Self-insure or Not

Experts suggest middle-class Americans should purchase long term care insurance because they are more vulnerable to financial drawbacks brought by LTC. However, this creates confusion among upper-middle and high-income Americans as to whether purchasing LTCi or not would be beneficial, particularly these people think they have overflowing savings and resources to pay for the health care services, treatments and medication. Sometimes, over-confidence and complacency kill right thinking and decision-making.

People would reiterate, “I have saved more and won’t run out of savings in case my health fails big time!”  Good if it turns that way. Many individuals have retirement savings ranging between $500,000 and more, assuming that these nest eggs would last more than the average working class. Nevertheless, being realistic on the current condition of the health care system in the country will help you realized the things you’ve snubbed.

Most individuals consider using their retirement savings for a business or anything that would spawn money to keep their independence, and spending it for long term care services is excluded on the their priority list. Regrettably, the cost of care for just a year in a nursing home in 2011 ran the average of $85,775, according to Hancock Survey. Last year’s cost will eventually increase four-fold in the next few years. A typical Alzheimer’s patient would need care around four to eight years that may force him or her to spend the lowest amount of $700,000 to several millions. Having a realistic look at the costs of long term care, one will realize that he needs to exhaust retirement savings to sustain all those expenses