Let's say the total premium is $4k per year for both spouses [ours is less than that]. Assuming 8% rate of return over that period, that would be about $183k at the end of 30 years. The handy-dandy java savings calculator says that $4000 a year compounded annually at 8% grows to about $500K in 30 years. FWIW, at the long-lerm S&P average of 10.5%, the end value is $800K.But I take your point.Trying to self-insure for a worst-case scenario (decades of living in an Alzheimer's unit) is almost impossible. The saving grace is that this worst-case is very rare.One problem is the opportunity cost. $4000 a year that you give to the insurance company is $4000 that is NOT growing your net worth.Our view is that instead of trying to separate our potential retirement expenses into buckets and trying to fill each and every bucket, to work toward having one huge pot of money at retirement and divert it to whichever bucket needs money.$1M is not enough.$2M probably is.$3M-$4M cetainly is.I wouldn't expect to get these premiums back. Do you get all your homeowners insurance back every year that the house doesn't burn down? What about your car insurance? Do you get that premium back if you never have an accident? And if you die early, then you're not paying those premiums for 30 years either. Yes, I agree with all these things. The one that would most concern me is slightly different. What if you've been paying the premium for X years, but then something bad happens--like you lose your job--and you can't afford to pay the premium for a couple of years.Do you lose your policy? Do they let you make it up?
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