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Nationwide CareMatters II Objective Review

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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.

Let’s answer some common questions regarding CareMatters II before I review this product.

What Is CareMatters II?

CareMatters II is a universal life insurance policy that provides long-term care coverage through attached riders. This hybrid long-term care life insurance product provides both long-term care insurance and life insurance in one single policy.

CareMatters II 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.

Illustration of how hybrid LTC life insurance works
Hybrid Long-term Care Life insurance

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 the accelerated death benefit is finished, the policy 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 covers a wide range of long-term care services. Nationwide places no restriction on how your benefits can be used. Therefore benefits can be used for a range of long-term care services including:

  • Home Healthcare
  • Adult day care
  • Assisted living
  • Nursing home care
  • Alternative care services
  • 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. CareMatters II offers a range of premium payment options including a single premium option and a 10-pay option.

Key Features of CareMatters II

So Nationwide’s hybrid long-term care insurance is called “CareMatters II.

Anytime you consider a hybrid long-term care life insurance policy, you must look at the “5 things” that affect the quality of these policies.

Here are those 5 factors:

  1. Long-term Care Benefit Amounts
  2. Benefit Periods
  3. Elimination Periods
  4. Inflation Protection Options
  5. Premium Payment Options

(For a description of the 5 factors and how they affect a hybrid-LTC policy, feel free to read “5 Things to Review In Every Hybrid Long-term Care Policy.”)

Later in this post, we will uses those 5 factors to determine the strength and quality of CareMatters II to its competitors.

However, before we do that, CareMatters II has some very unique key features that need to be discussed. Therefore, let me go over them before we do our product comparison.

Indemnity (Payments Of Benfits)

Almost all hybrid long-term care insurance policies pay benefits in the form of reimbursements. However, Nationwide CareMatters II is an indemnity policy. It is one of maybe two policies on the market that provides you benefits in this manner.

With an indemnity policy, monthly benefits are paid to you at a set dollar amount. They are not based on the your long-term care expenses.

Therefore, there is no monthly requirement for you to submit your bills or receipts of long-term care expenses so you can receive your benefit payments.

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.

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.

Although you had to wait 90-days to receive your first benefit payment, you will receive benefits for the time you had to wait. No other hybrid long-term care life insurance policy on the market offers retroactive payments for the elimination period.

Premium Payment Options

Nationwide CareMatters II stands out with its premium payment options as well. You can now pay premiums to age 65 or all the way to age 100. These payment options are subject to age limits however.

Nevertheless, this is unique as most competitors only offer you the standard 5 year, 10 year, or single pay option.

CareMatters II also offers the you the option to pay a larger lump-sum premium at the time the policy is issued along with 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.

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.

The amount and timing of premium payments will be fixed and determined at policy issue.

Now that we’ve gotten CareMatters II key features out of the way, let’s see how it compares to other hybrid long-term care insurance products.

How Does CareMatters II Compare To Other Hybrid LTC Products?

Undoubtedly, CareMatters II stands out with some very interesting & unique key features. However, one of the most important things to consider when analyzing a policy is the amount of LTC benefits being offered.

The best way to do this is by comparing CareMatters II to some of its competitors using illustrations. Our illustrations will be based on a 60 year old male with a $100,000 single premium asking for a benefit period of 6 years.

We will compare illustrations for Nationwide’s CareMatters II, Lincoln Financial’s MoneyGuard II, and Pacific Life’s PremierCare.

Here are the illustrations below. (Click the illustrations for a larger view)

Now the illustrations were designed to be as identical as possible in regards to premium input, payment option, benefit period, & inflation protection.

(Note: PremierCare does not offer a 3% compound option so we selected 5% compound).

From the illustrations, CareMatters II offers a competitive first day maximum monthly LTC benefit amount.

  • MoneyGuard II offers a benefit of $5,200 a month
  • CareMatters II offers a benefit of $4,800 a month
  • PremierCare offers a benefit of $3,500 a month.

Although CareMatters II offers $1300 more a month than PremiereCare, it falls short of MoneyGuard’s offering by $400. So it is in “the middle of the pack” but not too far from being the “leader.” If you were considering a CareMatters II policy, it would not be a bad deal.

Nevertheless, CareMatters II appears to be competitive. Now there are a couple of things we must consider.

The Inflation Protection Option for Pacific Life’s PremierCare

First, Pacific Life’s PremierCare is illustrating at a higher inflation protection amount. It is illustrating at 5% compound inflation protection as oppose to CareMatters II 3% compound inflation protection.

Hence, Pacific Life’s PremieCare illustration will have reduced first day long-term care benefits on a comparative level to the Nationwide’s CareMatters II illustration.

Return of Premium Option for Nationwide’s CareMatters II

Second, we must take into consideration the Return of Premium (ROP) options available for each individual product.

All three product illustrations reflect their lowest available return of premium option. The reason I did this is because the lowest return of premium option will reflect the most long-term care benefit for a given premium.

CareMatters II offers a substantially lower return of premium option out of all three of its competitors.

Let’s examine this further:

  • Lincoln Financial’s MoneyGuard II least available ROP option is an 80% return of premium.
  • Pacific Life’s PremierCare least available ROP option is a 100% return of premium with a vested schedule of 15 years.
  • Nationwide’s CareMatters II least available ROP option is the Cash Surrender Value of the policy.

So what does this all mean?

It means, based on the illustrations, it would take Nationwide’s CareMatters II 21 years to offer a return of premium that Lincoln’s MoneyGuard II offers on day one. Also, it would take 34 years to offer a full return of premium that Pacific Life’s PremierCare offers at year 15.

Therefore, it would take Nationwide’s CareMatters II a very long time to offer you your money back if you changed your mind!

If a return of premium option is important to you, this can be a cause for concern.

Comparison of Benefits at Age 80

Let’s take a look at the illustration’s projections for the LTC benefit amount at age 80.

(Click the illustrations for a larger view)

At age 80 the illustrations shows:

  • CareMatters II offers a maximum monthly LTC benefit amount of $8,446
  • PremierCare offers a maximum monthly LTC benefit amount of $9,378
  • MoneyGuard II offers a maximum monthly LTC benefit amount of $9,425

Both competitor products of CareMatters II offer almost $1,000 more in benefits!

Let’s put this into perspective. If you were the 60 year old male, CareMatters II is a good option for its day one benefits. However, 20 years from now, when you may really need your policy, CareMatters II loses some of its strength.

Overall, based on the illustrations, Pacific Life’s PremierCare with inflation protection would outperform Nationwide’s CareMatters II and CareMatters II does not come close to MoneyGuard II’s performance.

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:

  1. Concerns about receiving benefit payments by submitting LTC expenses every month
  2. Interest in receiving retroactive benefit payments for an elimination period
  3. Needing more flexibility for premium paying options
  4. Wanting the all of the above features plus reasonably competitive LTC benefits.
  5. Desiring all of the above features and has no interest in a return of premium option

If your concerns are in line with several of the points above, then CareMatters II is worth discussing. Otherwise, as we have seen, there are more competitive products on the market that offer stronger LTC benefits.

Our review is not meant to discredit CareMatters II. Instead it highlights the point that everything comes at a cost. All the options and added features a policy has can affect the strength of your LTC benefits can be affected.

The more your premium dollars are spent on added benefits and features, the less your dollars are spent on LTC benefits.

Nevertheless, to reiterate, CareMatters II is a decent product and may be suitable for the right person.

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.

However, 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, it cannot be definitively said that this is your best option.

Request A FREE Quote Today!

If you are interested in CareMatters II, MoneyGuard II, PremierCare, or you are looking to discuss a long-term care plan, reach out to us now!

Give us a call today at 1(800) 498-3955 or request a FREE quote below!

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