Why are long-term care costs so hard to predict?

There are a few reasons.  One, long-term care costs can vary from zero to well over a million dollars over the course of a client’s lifetime.  Two, long-term care costs are closely tied to the longevity of a client.  The longer a person lives, the more the chances of incurring a long-term care event.  A healthy person with a long expected lifespan will have more risk for long-term care costs than an unhealthy person with a short expected lifespan.  Third, a huge amount of actuarial calculations must take place to compute the probability distributions.  Fourth, an assessment of the longevity and propensity for long-term care of the client must be assessed. So a combination of the nature of long-term care costs and the work required to perform the computations is why these costs are hard to predict.