Template:Long-Term Care Calculator Exersice
From Planipedia
Solve for the following problem:
Jesse Jones wants to purchase long-term care insurance to fund home care expenses and facility care expenses from his age 75 and 85 respectively. However, he is electing to insure 70% as opposed to complete self-insurance or full 100% insurance. Jesse’s detailed information is below:
- Current Age: 55
- Retire By: 55
- Mortality: 90
- Inflation: 3.0%
- Rate of Return: 9.0%
- Marginal Tax Rate: 20%
- Cost of Home Care/Month: {{{Cost of Home Care}}}
- Cost of Facility Care/Month: {{{Cost of Facility Care}}}
- How much is the present value of the cost to self-insure these expenses? $_____
- How much is the present value of insuring 70% of these expenses? $______
- How much is the present value of insuring 100% of these expenses? $_____
Solve for the following problem:
Charlie wants to have an Emergency Fund for the event that he has to fund long-term care expenses himself. He does not currently have any money in this Emergency Fund, but plans to save an indexed amount of {{{Savings}}} annually. Given that Charlie wants to self-insure as much as possible, within his savings limits, what percentage of the expenses would you elect him to insure – 0%, 50% or 100%?
- Current Age: 40
- Retire By: 55
- Mortality: 90
- Inflation: 3.0%
- Rate of Return: 9.0%
- Marginal Tax Rate: 35%
- Home Care Expenses/Month: {{{Cost of Home Care}}}
- Home Care Starting Age: 80
- Facility Care Expenses/Month: {{{Cost of Facility Care}}}
- Facility Care Starting Age: 85
Check the accuracy of your client against the answer key
