A planning scenario that models several years of high care costs to test whether an owner can self-insure or needs long-term care insurance.
A long-term care stress test asks whether the plan still works if the owner needs years of paid care. A common model uses 24-hour care for five years, starting at about $10,000 per month and rising about 5% a year. The test then shows remaining investable assets.
The $10,000 figure matches recent national medians. CareScout's 2025 Cost of Care Survey put the U.S. median private nursing-home room at $10,798 per month. Semi-private rooms ran $9,581. Home-care costs differ by hours and location.
If the plan still holds after the test, the owner can consider self-insuring. If it breaks, the owner needs insurance, a smaller gift, a slower debt payoff, or a different deal structure. The test does not decide for the owner. It shows the cost of the risk.