In a recent issue of Kiplinger’s Personal Finance, this question was posed: “What is the rule of thumb for the assets you need to self-insure against potential long-term-care costs versus paying premiums for long-term-care insurance?”

Here is their answer:

“Everyone who can afford the premiums should at least consider buying long-term-care insurance, no matter how much savings you have. The costs for extended care in a nursing home, assisted-living facility or in your own home can be so large that they could destroy your retirement savings, even if you start out with a substantial nest egg. The protection becomes even more valuable if your retirement-account balance has tumbled over the past year or so.

The average cost for a private nursing-home room is $74,208 a year ($203 a day), according to the cost-of-care survey released April 30 by insurer Genworth Financial. And that’s in today’s dollars. If the cost of care continues to rise at its current rate (more than 4 percent per year), then one year in a nursing home could be more than $270,000 if you need care in 30 years.

Nearly three-fourths of Genworth’s initial claims are for long-term-care services received in the home, and those expenses can be even higher. The survey found the average rate for state-licensed home health aides was $18.50 per hour, which adds up to more than $400 per day for people who need 24-hour care.

You could buy a long-term-care policy with a daily benefit that would cover the entire cost, or you could buy enough insurance to cover a portion of the cost and plan to self-insure extra expenses yourself, which still limits some of your risk.”