Nationwide is a Fortune 100 insurance company. It offers a full range of insurance products including hybrid long-term care life insurance. “CareMatters II” is the name of their Hybrid Long-term care Life insurance.
What Is CareMatters II?
CareMatters II is a universal life insurance policy with a qualified long-term care insurance rider. This product combines both long-term care insurance and life insurance into one single policy.
This combination offers you flexibility. In the event you need long-term care, it provides long-term care benefits. However, if you never need care, the policy provides a death benefit or a return of premium option.
How Does CareMatters II Work?
CareMatters II uses the life insurance policy’s death benefit while you are alive to provide you with long-term care benefits.
Once you’ve exhausted the accelerated death benefit, the policy then uses a Long-term Care Extension of Benefits Rider to provide you additional coverage.
Between the accelerated death benefit and the LTC Extension of Benefits Rider, CareMatters II can offer you up to 7 years of long-term care benefits!
What LTC Services Does CareMatters II Cover?
CareMatters II can cover a wide range of long-term care services. Nationwide places no restriction on how your benefits can be used. Therefore services covered include :
- Home Healthcare
- Adult day care
- Assisted living
- Nursing home care
- Alternative care services
- Informal care from immediate family members
- Any LTC service existing today or developed in the future
These are some of the typical uses for benefits provided by CareMatters II.
How Do I Qualify For CareMatters II?
If you are between the ages of 30-75, you can apply for a policy. Approval for CareMatters II is subject to underwriting and may require a medical exam.
The rate classes for CareMatters II are Single non-tobacco/tobacco use and Couples non-tobacco/tobacco use.
How Is CareMatters II Funded?
CareMatters II offers a range of premium payment options including:
- Single pay premium option
- 10-pay premium option
- Premium payments to age 65 (subject to age limits)
- Premium payments to age 100 (subject to age limits)
CareMatters II also offers you the option to pay a larger lump-sum premium at the time the policy is issued followed by smaller recurring premiums.
The recurring premiums can be for a period of 5 years, 10 years, to attained age 65, or to attained age 100.
The amount and timing of premium payments are fixed an will be determined at policy issue.
This option works well if you wanted to do a 1035 exchange or transfer but the funds are not enough to buy a sufficient policy for your needs.
How Does CareMatters II Pay Benefits?
Nationwide CareMatters II pays an indemnity benefit check. It is one of maybe two policies on the market that provides benefits in this manner.
There is no requirement for you to submit your bills or receipts of long-term care expenses so you can receive your benefit payments.
With indemnity benefit payments, monthly benefits are paid to you at a set dollar amount. They are not based on the your long-term care expenses.
Nationwide will first determine if you meet the policy’s long-term care claims requirements. If eligibility requirements are met, Nationwide will pay you your monthly benefit check.
Your check amount will be based on the maximum monthly LTC benefit amount that you qualify for in your policy.
Key Features of CareMatters II
Guaranteed Minimum Death Benefit
Nationwide CareMatters II offers a very competitive guaranteed minimum death benefit.
The guaranteed minimum death benefit is typically 20% of the specified amount, assuming there were no loans or partial surrenders in the policy.
The specified amount is the amount used to determine LTC benefits and the death benefit in a policy.
Index Inflation Protection Option
CareMatters II is very unique as it is the only hybrid that offers a U.S. Medical Care Inflation Option.
This is an index rate inflation protection option as oppose to a fixed 3% or 5% inflation protection option.
Under this option, the maximum monthly LTC Inflation Benefit Rider Amount will be based on the greater of the performance of a Reference Index (subject to a floor rate of 0% and a cap rate of 6%) and a fixed LTC Rollup Inflation rate of 2%.
The Reference Index is currently the Medical Care Component of the Consumer Price Index for All Urban Consumers, Unadjusted.
Elimination Period (Retroactive Payments)
Nationwide’s CareMatters II is even more unique as it pays you retroactive long-term care benefits for the elimination period.
Once the 90-day elimination period is met, long-term care benefits will be paid to you for those 90-days. In addition, you will be paid your benefits for the first month after your elimination period.
How Does CareMatters II Compare To Other Hybrid LTC Products?
CareMatters II is quite competitive in today’s hybrid LTC market. Now when comparing hybrid long-term care insurance policies, it is important to review the following 5 categories:
- Long-term Care Benefit Pool (LTC Benefit Amount)
- Benefit Periods
- Elimination Periods
- Inflation Protection Options
- Premium Payment Options
(For a description of these 5 categories and how they affect a hybrid-LTC insurance policy, please read our post “5 Things to Review In Every Hybrid Long-term Care Policy.”)
Now CareMatters II already offers standard or exceptional performance in 4 of the 5 categories: Benefit Period, Elimination Period, Inflation Protection Option, and Premium Payment Options.
Therefore, the last remaining category and the most important one to consider when comparing policies is the LTC Benefit Pool.
Let’s see how CareMatters II compares to other products using a case study.
Case Study: Jack
Jack is a 60 year old male from Texas looking for a policy. He wants to place a $100,000 into the policy in a single premium and he’s asking for a 6 years benefit period.
Jack is in decent health and does not smoke or use tobacco.
Nationwide CareMatters II
Let’s see what CareMatters II can offer Jack.
Here is their illustration below. (Click the illustrations for a larger view)
Based on the illustrations, for a $100,000 single premium, CareMatters II will provide Jack with $346,797 in total LTC benefits!
That’s a maximum monthly LTC benefit of $4,800.
In addition, this policy also provides Jack with retroactive payments for the 90 day elimination period as well as 3% compound inflation protection.
Pacific Life PremierCare
Now let’s see what a competitor’s product like Pacific Life’s PremierCare can offer Jack.
Based on the illustration Pacific Life PremierCare offers Jack $387,443 in total LTC benefits and a monthly LTC Benefit of $4,783.
Although Nationwide offers Jack slightly less in total benefits, CareMatters offers you retroactive payments for the 90 day elimination period. Pacific Life PremierCare does not pay you for expenses incurred during the 90 day elimination period.
Conclusion – CareMatters II Gives You Options
So what are the takeaways about this products performance?
CareMatters II is a decent product that may be suitable for the right individual.
Here is where CareMatters II may be a viable option for long-term care planning needs:
- Concerns about receiving benefit payments by submitting LTC expenses every month
- Interested in receiving retroactive benefit payments for the elimination period
- Needing more flexibility for premium paying options
If your concerns are in line with the points above, then CareMatters II is worth discussing.
Is CareMatters II Right For Me?
CareMatters II offers you long-term care coverage with added flexibility. It may be a good fit for the right individual.
Determining if CareMatters II is a good fit for you will be based on your long-term care goals and planning needs.
Without this knowledge, we cannot definitively say it is your best option.
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