LTC will typically not pay everything and you may run out of insurance if you end up needing care longer than the number of years you have purchased.

And yes, having a 2 million dollar nest egg isn't what is meant by wealthy enough to self insure.

If you are lucky you will never need it, but none of us know.

In order to self-insure, you need to be uber wealthy. Having $2M in retirement, for example, won't cut it. A relative of mine is in a nursing home right now after suffering a stroke. She is paying over $7K per month for that luxury.

In addition, she gets bills for things that aren't covered under the standard nursing home care. For example, she developed an infection in her foot and she needed some kind of boot or something and some medication. That isn't part of the care. It would come under her insurance policy. She, however, did not have a prescription plan because she was perfectly healthy (or so she thought) before her stroke and took minimal medication. For the last few months her "extra" medications and such for some infections have come to $2500 per month!

Fortunately, she did have LTC insurance, which is paying about $5K of her nursing home bill. But everything else has been out of pocket. If she didn't have LTC, she would have blown through her assets pretty quickly.

Keep in mind that nice LTC in this area can be $120,000 per year. Plus if there is a surviving spouse, s/he will have normal living expenses.

If you are very wealthy then you are better off paying out of pocket, effectively self-insuring.

If you are of moderate means, then you probably can't afford it.

But if you are in the middle then it can be worth looking into.

If your worried about losing your savings/assets due to a long term care or other unforeseen medical costs don't forget there are ways to hide those assets. A trust being one of the more common ways.