If you have considerable assets, you may feel that self­ insuring is the best solution, but there is only one advantage to self-insuring – you will not pay premiums for insurance coverage. The disadvantage to self-insuring is the lack of “financial risk transfer,” meaning that when you need care, you will bear the entirety of the financial risk, and that can lead to a rapid and significant depletion of your savings. Most people understand that not owning homeowners insurance is a huge risk because a catastrophe could be so costly. People should take the same consideration with health and long term care, as costs are high and increasing.

For example, the current (2019) national median cost for home care services is $53,000 per year, and $49,000 annually for a private room in an assisted living community – that adds up to $265,000 to $245,000 for five years of care. Should you need skilled nursing care, the current (2019) national median cost is about $102,000 per year for a private room – that’s over $500,000 for five years of care! Given that the cost of care is rising higher than the general rate of inflation, 10 years down-the-road these costs are expected to range from over $377,000 for five years of home care to as much as $725,000 for five years of skilled nursing care!