This is a unique hybrid LTC policy with the possibility of a cash indemnity LTC benefit. Hybrid LTC policies make certain several things, one; that there will be long term benefits, that there will be life insurance benefit for your beneficiaries, a combination of LTC benefits and Life Insurance Benefits and a guaranteed return of premium upon a change of mind regarding the policy. This configuration basically addresses the three major concerns that LTC customers always have; What if I purchase a long-term care policy but never require one? What if the rates rise and I cannot afford it? What if I realize later that the policy is just not for me?
What is unique to Nationwide’s LTC policy?
There is a cash indemnity LTC benefit that can be applied to all your LTC needs such as nursing home care, hospice and informal care, home care and assisted living. With the cash indemnity LTC benefit, the benefit is paid each and every month, the benefits can be used for whatever your LTC needs are even if the LTC expenses and benefit amounts do not match. Informal caregivers that include family can be paid for providing care to the contributor. The norm in the insurance industry us that reimbursements are offered for all expenses paid with out-of-pocket money. This requires the submission of receipts for the LTC expense payments which could be approved and at times not.
Like many other hybrid LTC plans, the contributor has to decide on the benefit period, monthly benefit and whether to elect inflation protection. The benefit periods range from two to seven years. This is a year shorter than the best in the industry which is basically about 8 years. The monthly benefit varies from $1,500 to $15,000 depending on the elected benefit period and the life insurance benefit. A higher life insurance amount translates to more benefit. The elimination period stands at 90 calendar days. The inflation protection can be elected and provides two options; 3% simple or a 5% compound. The premium can be paid as a single one-time upfront payment or in two other options’ 5 pay and 10 pay.
There is a residual death benefit that stands at 205 of the policy value. This basically implies that if you exhaust your entire death benefit amount on covering LTC expenses, the company will still pay your beneficiaries 20% of the policy value as death benefit upon your death. There is also a return of premium rider subject to varied vesting schedules starting at 85% in year 1 and gradually increasing to 100% in year 6.
Pricing varies greatly depending on the company. However, despite not being among the least-costly, the fact that the company provides cash indemnity benefits instead of reimbursements makes it a very attractive option. The lowest priced hybrid LTCs are those provided by the Lincoln Financial Group and OneAmerica’s State Life Asset Care. The residual death benefit also makes Nationwide’s LTC policy one worth considering among the best options.