Originally Posted by JohnDoe
Can someone please explain self insurance?
My estate attorney said we should look into LTC. I am only 37 and wife is 42.
It seems the daily coverage, typically $150, is not close to what the daily cost would be, if an accident happened. I'm having a hard time convincing myself I need this.
Maybe you don't
need LTC insurance--most people wait until they are older before buying it. It is very unlikeky that someone your age will find themselves being unable to do several of the "activities of daily living" that would put you into a nursing home or require care in your home.
By waiting you'll save a lot of money. You'll also be taking some risk--you COULD have a stroke/car accident next week that would put you into this situation (very unlikely), or (more likely) you could develp a health condition that would make buying a policy later more expensive.
$150 dollars a day won't entirely cover the cost of a nursing home in the average US city, but it will come close. If you live in the NE it will be more expensive, more affordabe in the south. Also, if you've got other money coming in (from investments, a pension, etc) that could cover some of the costs. Remember that if you are in this situation, you won't be needing money for travel, etc.
Self-insurance: Hmm. It's very expensive to pay for this type of care. If you are single, it is probably not unreasonable to put away enough to cover an extended stay in a nursing home. I think it is harder to make this work for a couple, since you'd need to have enough squirreled away to cover the worst of either of two situations:
1) two extended nursing home stays
2) One extended nursing home stay and one long, full retirement (with the normal expenses)
I'm still procrastinating on buying LTC insurance. When my state finishes building/nominating/gettting approval for various plans that will qualify under the new rules, I'll probably look at those and buy in. It's not an easy decision--this coverage is expensive, and the typical ER would need to give up some real money every month to pay for something that we'd rather not use.