Nationwide’s CareMatters II – A Cash Indemnity Policy!
When we hear the name “Nationwide,” we often think car insurance. Sometimes we may even think of the jingle. However, back in 2013, Nationwide introduced to the long-term care insurance marketplace its own, very special, hybrid long-term care insurance called CareMatters.
So what makes Nationwide’s CareMatters so special? Well, in a marketplace dominated by reimbursement long-term care insurance policies, CareMatters II stands out as a Cash Indemnity Policy!
Now what does that mean for you? Well if you ever had the experience of filing a claim on a reimbursement long-term care insurance policy, you know sometimes the paperwork can be quite tedious.
In order for you to get your benefits with a reimbursement policy, you have to submit bills or receipts of long-term care expenses incurred. Then once received, the insurance company will reimburse you or the facility only for qualified long-term care expenses.
However, with Nationwide’s CareMatters Cash Indemnity Policy there is no need for submission of bills or receipts! A monthly check, up to the maximum amount of long-care benefits you qualify for, will be paid directly to the policy owner regardless of actual expenses incurred!
This offers you more flexibility in regards to what you do with your benefits and how you choose to use them!
Now, not only is CareMatters II great for offering a cash option, but it also priced quite competitively. Therefore, as we continue, let’s take examine Nationwide’s CareMatters II in more detail.
In this article we will discuss:
How Does CareMatters II Work?
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.
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 you use your benefits once you are claims eligible. 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 30-70, 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?
Again, Nationwide CareMatters II pays a monthly LTC benefit check directly to the policyowner once the insured is claims eligible. As a Cash Indemnity Policy, there is no requirement for you to submit bills or receipts of the long-term care expenses you incurred.
Nationwide will first determine if you meet the policy’s long-term care claims requirements. Once eligibility requirements are met and the elimination period is satisfied, you should begin to receive you monthly benefit payments. These monthly benefits are paid to you at a set dollar amount based on the maximum LTC benefit you qualify for in your policy.
This feature is great as it allows you to use your benefit payments however you desire! For example, you can use your benefits to pay someone to provide informal care. As you can see, a cash indemnity policy gives you added flexibility.
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
Now CareMatters II is currently quite competitive in today’s Hybrid LTC Insurance market. It typically 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 LTC Benefit Pool.
Case Study: Jack
Jack is a 60 year old married man in Illinois looking for a hybrid policy. He wants to place a $100,000 single premium into the policy he’s asking for a 6 year benefit period.
Jack is in decent health and does not smoke or use tobacco.
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 illustrations, for a $100,000 single premium, CareMatters II will provide Jack with a total of $4,987 in initial monthly LTC benefits at with a benefit period of 6 years.
At age 80, Jack will have a maximum monthly LTC benefit of $9,007. This is due to a 3% compound inflation attached to the policy. Now let’s move ahead and see what Lincoln’s MoneyGuard and Pacific Life’s PremierCare can offer him.
Lincoln Financial’s MoneyGuard III – Comparison
Here’s what Lincoln’s MoneyGuard can offer Jack for the same premium deposit of $100,000:
Based on the illustration Lincoln’s MoneyGuard III offers Jack an intial monthly LTC Benefit of $4,149 for 6 years. That’s $10,000 less a year in benefits than Nationwide’s offer.
At age 80, based on the tabular illustration, Lincoln’s MoneyGuard will offer Jack $7,494 in monthly LTC benefits. Again this due to a 3% compound inflation option. That is $18,000 less a year than Nationwide’s offer at age 80.
So far Nationwide’s CareMatter’s is outdoing the competition. Let’s look at how it compares to Pacific Life’s PremierCare before we draw our final conclusion.
Pacific Life’s Premier Care – Comparison
Pacific Life’s Premier Care has a history of typically pricing well for males. Let’s see what it can off Jack at age 60 for $100.000 in funding:
Based on the illustration, Pacific Life’s Premier Care is offering Jack an initial monthly benefit of $4,138 for 6 years. Again, Nationwide will give Jack $4,987 in initial monthly benefits. Therefore, Pacific Life’s offer is $10,000 less a year in benefits than Nationwide’s.
At age 80, Pacific Life’s Premier Care will give Jack $8,276 in maximum monthly benefits. This is due to a 5% simple inflation option (Pacific Life does not offer a 3% compound option).
Nevertheless however, this is still less than Nationwide’s offer of $9,007 a month at age 80. Again, that is $10,000 less a year in benefits than Nationwide’s, even at age 80.
Conclusion – CareMatters II Is A Front-Runner
At this point, we can clearly conclude that Nationwide’s CareMatters II leads the field against the Hybrid Long-Term Care Insurance competition. Not only does it offer the most benefits for your dollar, again, it is also a Cash Indemnity Policy.
In addition, it also comes with great features such as Retroactive Elimination Period Payments and a higher than average Guaranteed Minimum Death Benefit.
Therefore, I definitely recommend CareMatters II as a hybrid policy worth considering. If you agree and you like 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 is 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.
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