Updated September 30, 2020
Nationwide Care Matters II – Cash Indemnity Long Term Care Insurance
Nationwide's CareMatters II policy series provides policyholders with "cash indemnity" benefits which is a huge win for you at claim time. Rather than have onerous paperwork each month documenting expenses, you are not required to submit bills or receipts to Nationwide. In talking with thousands of folks, the #1 complain about LTC claims is the amount of paperwork that companies request in order to be reimbursed.
You spend your benefit as you want. Once you qualify for your Long Term Care Benefits, they literally mail you a check each month and do not restrict how you use it. You and your doctor drive the decisions about who, what, where, and when you receive care.
Like most "hybrid" Long Term Care policies, Nationwide's hybrid long-term care insurance policy is 100% guaranteed. Your benefits cannot go down, and your premiums cannot go up. This is polar opposite from how "traditional" LTC policies work, where premiums are not guaranteed and there are stories about rates doubling on policies down the road.
When it comes to insurance, guarantees matter. Other hybrid products (we won't mention names) may provide "non-guaranteed" illustrations. These should be completely ignored as they often rely on market performance or dividends - both volatile from time to time.
Pros and Cons
Differing from a traditional long term care insurance policy, a hybrid long term care policy grants you both long term care coverage in addition to a life insurance benefit in the event that care is never needed. In most cases, your life insurance amount will either amount to or even exceed premiums paid. For older policyholders buying this past age 65, you may see a smaller death benefit than premium, but it'll be close.
As with anything tax, consult your CPA. These plans are designed to provide both life insurance and long-term care benefits tax-free, up to IRS per-diem limits. As of 2020, this limit is $380 per day. Meaning you can receive benefits up to $380/day (or $11,400/mo) before it is considered taxable income. Over thousands of policies written, we've never seen a policy we sold exceed this amount -- it's just not necessary.
This translates into a tax-free life insurance benefit minus any claims, which will then be paid out to your family.
Your Hybrid Long Term Care Insurance policy’s benefits are available to you whether you Die, Live or cancel and cash out. The policy comes with three core features:
Long Term Care Insurance benefits – are built into the plan and highlight the amount of money your policy cover each month for home care, assisted living, nursing home care or adult day care.
You should note that Nationwide will pay you the full monthly benefit amount regardless of your actual long term care expenses each month. Meaning you may keep any left over amount.
- Life insurance benefit -Includes a tax-free life insurance benefit built into your plan that equal to or more than what you paid in premiums. This ensures you do not lose the money you paid in. This additionally, ensures an asset passed to your family in the case that care is never needed.
- Cash-Out Value – In the case that you change your mind and wish to cancel your policy, you will receive either all or most of the money you paid minus any surrender charges. Nationwide does charge a surrender charge, and it can be hefty. If you intend to consider cancelling or surrendering in the future, there may be better options like Minnesota Life or PacLife.
The Best and Most Important Part: Hybrid Long Term Care Insurance is fully guaranteed and YOUR premium will never increase.
How are benefits paid to you with the Nationwide CareMatters II Cash Indemnity Policy?
Long Term Care Insurance policies pay your benefits either reimbursement or indemnity.
Usually, long Term Care Insurance policies feature a reimbursement of the out of pocket cost you pay for care each month.
Reimbursement Long Term Care Insurance policies will cover the costs of Health Care, Assisted Living, Nursing Home or Adult Day Care up to your policy’s monthly limit. Individuals are required to record and submit receipts and bills each month for reimbursement by the insurance company. In the occurrence that you bill was less than your monthly maximum benefit, you would only receive the amount of money you incurred for care back to you.
Cash indemnity long term care insurance policies will instead pay out your full monthly maximum benefit and place no restrictions on how that money is used. You are also not required to submit any receipts or bills once your claim has been approved.
Nationwide CareChoice II offers this indemnity option which gives you the option to spend your money as you see fit. This flexibility is especially useful for those who plan to receive care from family.
You also can also allocate any left over money each month on other needs such as bills, prescription drugs, food, etc.
Nationwide CareMatters II – Policy Benefits Options
Ages for Clients
30 – 75
Long Term Care Insurance Benefit Period Choices
Typically a 2-7 range but allows for 6 year benefit period.
Inflation Protection options
Offers an industry standard option of 3% simple, 3% compound, 5% compound. Also features a unique option to select US Medical Care Inflation. US Medical Care CPI is subject to a 2% floor and 6% ceiling. Over the past 10 years US Medical Care CPI has averaged 2.94% and consecutively 6.29% over the past 30 years.
Premium Payment options
Annual Pay, Single Pay, 5 Pay, 10 Pay, Pay to Age 65
Here’s Our Quick Take on the Nationwide CareMatters II Product
Initial positives of New CareMatters Policy
This policy offers coverage to a younger market! Todays youth or millennial generation is actually the most obese and unhealthy generation in over 100 years... so being able to purchase Hybrid Long Term Care Insurance prior to the appearance of any chronic health issues is vital.
This Nationwide product writes on the 30-39 age group otherwise commonly left out.
Inflation Protection Options: Flexible
The Medical Inflation CPI Inflation protection option is a great feature and a must add on. This still entails losing 1/3 of inflation protection but could entail 100% upside should medical inflation creep back up. If you consider that modern medicine may devise new ways to prolong life, the supply of customers will increase and likely drive up the medical inflation. Most risks which feature an opportunity risk of 33% but a potential gain of 100% are usually worth the risk.
Get an average of $40,000 on Day 91
Similar to most hybrid long term care plans, the Nationwide Care Matters II product features a 90 day deductible which requires you to pay for your care within the first three months care is needed. However, upon entering your forth month following your 90 days, your policy will pay you four months worth of benefit in cash. Pretend for example your monthly benefit was $10,000 on the first day of your claim the Nationwide Care Matters II product would pay you $40,000 to spend as you please. For many policyholders, your benefit will have grown this large by your 80s.
Obviously this can vary based on premium paid, age, etc. Consult an official illustration (or ask us to provide one with our quote request.)
Nationwide CareMatters II product is IRS TAX-Deductible for C-Corps!
The Insurance expense can be broken down into a long term care insurance charge and life insurance charge. This allows business owners to deduct an average of $35,000 off of their immediate taxes allowing for a $100,000 premium paid.
The Holes in the Nationwide CareMatters II product
You should note that the cash surrender value as associated with most companies excluding Pacific Life, will incur you a 20% or higher charge should you cancel your policy.
If you predict a chance you might elect to cancel your policy, then you should instead consider Pacific Life product which feature no surrender charge or perhaps Securian’s Minnesota Life plan which waives the fee following five years.
Nationwide CareMatters II Review of Cost
Can you stack rank Nationwide CareMatters II policy against all other hybrid long term care insurance policies on the market?
Currently, there exist 6other blue-chip hybrid long term care policies available on the market.
- State Life’s OneAmerica Asset Care policy
- Pacific Life Premier Care
- Lincoln Moneyguard
- John Hancock UL 17-18 LTC rider with Vitality,
- Minnesota Life–Securian SecureCare
- BrightHouse Financial.
State Life’s OneAmerica Asset Care product is the sole company offering a Lifetime unlimited Long Term Care benefit. This feature serves as a main selling point for the company however, the inflation adjusted amount in this product is not paid for the first 33 months of care whereas, Nationwide's adjusted amount is paid from day one. We like to think of the OneAmerican product as being as an unlimited policy with a 33 month deductible.
Nationwide CareMatters II can be more easily compared to Bright House, Lincoln Moneyguard II and Minnesota Life’s Securian SecureCare.
Lincoln Moneyguard II offers the less monthly long term care benefits typically, and operates as a reimbursement payment plan. Two knocks against them.
Bright House, Minnesota Life’s Securian SecureCare and Nationwide CareMatters II are 100% cash indemnity policies. Minnesota Life offers a bit more Long Term Care benefits whereas Bright House and Nationwide offer a better inflation protection feature.
Nationwide CareMatters II Financial Ratings and Product Conclusions
Nationwide possesses an A+ rating, pretty typical for a financial rating among the hybrid companies.
Our professionals which are licensed in all 50 states, know the Long Term Care Insurance market better than any firm in the country. If you wish to inquire more about the Nationwide CareMatters II product or any of the other companies, click to get your quote today.