Nationwide CareMatters II Review – A Cash Indemnity Policy!
Back in 2013, Nationwide Life Insurance Company introduced its hybrid long-term care insurance called Nationwide CareMatters.
The current version offered today is “Nationwide CareMatters II.”
Now Nationwide CareMatters II works like any other hybrid long-term care insurance policy. It offers you:
- Long-term care benefits if you ever have a long-term care event
- A death benefit if you never need long-term care
- A return of your premium if you ever decide to cancel
It also offers guaranteed premiums that will never increase. Now while it may offer standard protection, this product still manages to stand out as a long-term care insurance policy.
What makes Nationwide CareMatters II so special? It is one of only two long-term care products that offers 100% cash indemnity benefits. The other product is Securian Financial’s SecureCare.
“So what does cash indemnity benefits mean?”
You see, most long-term care insurance policies pay benefits on a reimbursement basis. Therefore, you have to submit bills or receipts of your long-term care expenses before benefits are paid.
However, with Nationwide CareMatters II Cash Indemnity Policy, there is no need for submission of bills or receipts!
Policy owners will receive a check of their monthly long-term care benefits regardless of their actual expenses!
This offers you so much flexibility in how you use your benefits. You can use your long-term care benefits however you like!
In addition, not only is CareMatters II great for offering a cash option, it is also competitively priced.
Let’s go over Nationwide CareMatters II in more detail to offer you a better understanding of this product.
How Does Nationwide CareMatters II Work?
Nationwide 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 great flexibility. For example, 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.
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 and protection!
What LTC Services Does Nationwide CareMatters II Cover?
CareMatters II can cover a wide range of long-term care services. Nationwide places no restriction on how you use your benefits once you are claims eligible! Therefore covered services 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 Nationwide CareMatters II?
If you are between the ages of 30-70, you can apply for a policy. Approval for Nationwide CareMatters II is subject to underwriting and underwriting requirements.
The rate classes for CareMatters II are Single non-tobacco or tobacco use and Couples non-tobacco or tobacco use.
How Is Nationwide 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 Nationwide CareMatters II Pay Benefits?
Again, Nationwide CareMatters II pays a monthly LTC benefit check directly to the policyowner once the insured is eligible for claims. As a Cash Indemnity Policy, there is no requirement for you to submit bills or receipts of the long-term care expenses you incurred.
Here’s how it works:
- Nationwide will determine if you meet the policy’s long-term care claims requirements
- Once eligibility requirements are met and the elimination period is satisfied, Nationwide will begin sending you your monthly benefit payments
Your monthly benefits are paid to you at a set dollar amount based on the maximum LTC benefit you qualify for in your policy.
Once again, this is a great feature as it allows you to use your benefit payments however you desire! For example, you can use your benefits to pay a relative to provide informal care. That is the added flexibility that can only be provided by a cash indemnity policy!
Key Features of Nationwide CareMatters II
Elimination Period (Retroactive Payments)
Nationwide 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.
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.
How Does Nationwide CareMatters II Compare To Other Hybrid LTC Policies
Now Nationwide CareMatters II is currently quite competitive in today’s Hybrid Long-Term Care Insurance market. It currently stands out as a go to product when considering Hybrid Long-Term Care Insurance.
Now when comparing hybrid 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 Long-Term Care Benefit Pool.
Let’s see how CareMatters II compares to other well known hybrids on the market like Lincoln’s MoneyGuard III. We will use a case study based on a 55 year old married man.
Case Study: 55 Yr. Old Male
Jack is a 55 year old married man in Illinois looking for a hybrid long-term care policy. Jack is in decent health and does not smoke or use tobacco. He wants to place a $60,000 single premium into the policy.
Let’s see what Nationwide’s CareMatters will offer him.
Nationwide CareMatters II
First, let’s see what CareMatters II can offer Jack based on his premium deposit.
Here is the illustration below:
Based on the illustration, for a $60,000 single premium, CareMatters II will provide Jack with a starting monthly benefit of $2,917 for a period of 7 years. That’s a total benefit pool of $268,242!
Fortunately for Jack as well, this policy also offers a 3% compound interest option.
Therefore, at age 80, Jack will have a maximum monthly LTC benefit of $6,108! This gives Jack a total benefit pool of $561,638!
This gives Jack over a half of a million dollars in benefits to use in a long-term care event. Also, as a cash indemnity policy, he can use his benefits however he likes!
Now let’s see what Lincoln’s MoneyGuard can off Jack.
Lincoln Financial’s MoneyGuard III – Comparison
Below is a Lincoln MoneyGuard offer for Jack for the same premium deposit of $60,000:
Based on the illustration Lincoln’s MoneyGuard III offers Jack a starting monthly LTC Benefit of $2,283 for 7 years.
That’s a total benefit pool of $209,949. That’s over $58,000 less in total benefit pool than Nationwide’s offer to Jack!
However, Lincoln also offers a 3% compound interest option like Nationwide.
Therefore, at age 80, Jack would receive $4,781 in monthly LTC benefits from Lincoln’s MoneyGuard with a total benefit pool of $439,605.
That is almost $130,000 less in total LTC benefits than Nationwide’s offer to Jack at age 80!
Hence, Nationwide’s CareMatter’s outperforms the competition. What can we conclude from all of this?
Conclusion – Nationwide CareMatters II Is A Front-Runner!
Nationwide CareMatters II is definitely a competitive Hybrid Long-Term Care Insurance policy and a product worth considering!
Nationwide CareMatters comes with great features such as:
- Cash Indemenity Benefits
- Retroactive Elimination Period Payments &
- A higher than average Guaranteed Minimum Death Benefit
Therefore, I definitely recommend CareMatters II as a Hybrid Long-Term Care Insurance policy worth considering!
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