Breaking News, it’s finally here! A Hybrid Long Term Care Insurance product that you can pay in one lump sum, or you can choose to pay in smaller premium payments each year.
Nationwide has updated its CareMatters cash indemnity long term care insurance policy this month replacing the old CareMatter product that was launched in 2013 with Nationwide CareMatters II.
The Nationwide CareMatters product was launched in 2013 as an alternative to the standard reimbursement hybrid long term care insurance policies such as StateLife’s One America Asset Care product or Lincoln Money Guard II. The new Nationwide Care Matters II product will pay you cash so you can spend it however you like vs. reimbursement plans which you must pay for the care yourself and then submit receipts to be paid back. This also limits the areas you can spend the money.
Minnesota Life which is owned by Securian, launched SecureCare in 2017 which have entered the marketplace with more aggressive pricing than the original Nationwide CareMatters policy and more flexibility in how the money is spent vs. Lincoln Money Guard II. These two behemoths battle one another for market share going back and forth as each try to one-up the other.
We have drilled down and examined the new Nationwide Care Matters II policy, we can confidently say it’s a drastic improvement over their old product which was rarely bought. Nationwide CareMatters II policy is now back in the top three of the hybrid long term care insurance policy comparisons with the new improvements.
Now let’s review and examine the new Nationwide CareMatters II Hybrid Long Term Care Insurance policy’s benefits and how it will help you
The new Nationwide CareMatters II policy is approved across the country except: CA and NY.
Nationwide Care Matters II – Life Insurance Linked With Long Term Care Insurance
The cutting edge Nationwide CareMatters II product joins around ten other linked-benefit HYBRID Long Term Care Insurance policies in the market today. These policies are also known to as asset-based long term care insurance or hybrid long term care insurance policies.
Unlike a traditional long term care insurance policy, a hybrid long term care policy will pay your family a life insurance benefit if care is never needed at death. If you do need long term care the plan will be there to pay for those services. The life insurance amount will be equal or even more than the premiums paid in depending on the company and your age This means that a tax free life insurance benefit will be paid to your family, less any claims.
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 are simply the amount of money your policy will pay you each month for home care, assisted living, nursing home care or adult day care. It’s important to know that regardless of your long term care expenses each month, Nationwide will pay you the full monthly benefit amount and you keep any money that’s left over.
- Life insurance benefit -there is a tax-free life insurance benefit built into your plan that is at least equal to what you paid in premiums. This preserves the money you paid in and creates an asset for your family to receive if long term care is never needed.
- Cash-Out Value – If you change and want to cancel your policy they will return all or most of the money you paid in less any surrender charges.
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.
Long Term Care Insurance policies typically pay benefits through a reimbursement of the out of pocket cost you pay for care each month.
Reimbursement Long Term Care Insurance policies will pay for home Health Care, Assisted Living, Nursing Home or Adult Day Care up to your policy’s monthly limit. You are required to submit receipt and bills each month for reimbursement by the insurance company. If your bill was less than your monthly maximum benefit, you will just receive the amount of money you paid for care back.
Cash indemnity long term care insurance polices by contrast will pay out your full monthly maximum benefit to you with no restrictions on how your money is used. Once your claim is approved, you are not required to submit monthly bills and receipts.
Nationwide CareChoice II offers the indemnity option and this feature gives you the flexibility to spend your money however you see fit. This freedom is particularly useful for you if you would like your family to take care of you
You also can spend any money left over each month on anything else you need help with such as bills, prescription drugs, food, etc.
Cash indemnity policies will provide you with the comfort of knowing no matter what changes the future may bring, your policy will be able to change with it.
Nationwide CareMatters II – Policy Benefits Options
Issue Ages for Clients
30 – 69
Long Term Care Insurance Benefit Period Choices
Technically it’s 2-7 years but everyone goes with the 6 year benefit period as thats the price sweet spot.
Inflation Protection Choices
They have the industry standard choices of 3% simple, 3% compound, 5% compound, but have a unique choice of picking the US Medical Care Inflation. This US Medical Care CPI is subject to a 2% floor and 6% ceiling and for the past 10 year has averaged 2.94% and over the past 30 years has averaged 6.29%
Premium Payment Choices
Annual Pay, Single Pay, 5 Pay, 10 Pay, Pay to Age 65
Here’s our quick-takes on the Nationwide CareMatters II product
What I Initially Like About The New CareMatters Policy
Coverage for the younger market! The Millennials are unfortunately the most obese and unhealthy generation in a century so being able to buy Hybrid Long Term Care Insurance before the chronic health issue pop up is critical. The Nationwide product now will write on the 30-39 age group that is commonly left out.
The Medical Inflation CPI Inflation protection option is a must add to any policy. The downside is only losing 1/3 of inflation protection but the upside could be 100% if medical inflation creeps back up. Think about it… as modern medicine figures out ways to prolong life this will increase the supply of customers of a more finite resource, doctors, and drive up the medical inflation in my opinion. Any time you have an opportunity to risk 33% to gain 100% I think it’s worth the risk when the odds are decent and back with history of the Medical CPI averaging 6% + the past 30 years.
Like with most all hybrid long term care plans, the Nationwide Care Matters II product comes with a 90 day deductible where you are required to pay for your care for the first three months of needing care. However, what makes the Nationwide Care Matters II different is at the end of the 90 days entering your forth month, your policy will pay you four months worth of benefit in cash. For example, if your monthly benefit was $10,000 on day one of your claim the Nationwide Care Matters II product would pay you $40,000 for you to spend however you like.
Nationwide CareMatters II product is IRS TAX-Deductible for C-Corps!
They have broken down the expense of the insurance into a long term care insurance change and life insurance charge. By doing so this will allow business owners to deduct on average $35,000 off their taxes immediately for a $100,000 premium paid in.
The Holes in the Nationwide CareMatters II product
The cash surrender value like with most with the exception of Pacific Life will hit you with about a 20% charge if you cancel your policy. If you think there is a realistic chance you might want to cancel your policy down the road then maybe consider the Pacific Life product that never has a surrender charge or Securian’s Minnesota Life plan which waives the fee after the fifth year.W
Nationwide CareMatters II Review of Cost
How does the new Nationwide CareMatters II policy compare with the other hybrid long term care insurance policies currently being sold?
There are currently six other blue-chip hybrid long term care policies available to choose from. Amongst them are State Life’s OneAmerica Asset Care policy, Pacific Life Premier Care, Lincoln Moneyguard II policy, John Hancock UL 17-18 LTC rider with Vitality, Minnesota Life–Securian SecureCare policy, BrightHouse Financial.
State Life’s OneAmerica Asset Care product is the only company that has a Lifetime unlimited Long Term Care benefit. This is the huge selling feature. However, the inflation adjusted amount won’t be paid for the first 33 months of care vs Nationwide of course will be paid from day one. We like to think of the OneAmerican product as being as an unlimited policy with a 33 month deductible.
Nationwide’s product compared to Pacific Life’s Premier Care is one where Nationwide wins on all front except PacLife has no fee if you change your mind. If you have a realistic chance to canceling your policy go with the PacLife or Minnesota Life plan. If not, Nationwide easily wins out on the other fronts.
Lincoln Moneyguard II 2019 is a reimbursement payment plan but offers the highest monthly long term care benefit.
Bright House, Minnesota Life’s Securian SecureCare and Nationwide CareMatters II are 100% cash indemnity policies. Minnesota Life gives slightly more Long Term Care benefits but Bright House and Nationwide have an innovative inflation protection feature.
Nationwide CareMatters II Financial Ratings and Product Conclusions
Surprisingly Nationwide with all of their Peyton Manning TV commercials has the lowest financial ratings of the hybrid companies with a 89% COMDEX financial rating score. This is a numerical average of all the main rating services such as AM Best, S&P, etc. Not to be afraid, all the others are going to just be a few points above them with State Life and Securian topping out at a 95% score. With that aside we love the indemnity and new Medical CPI inflation feature. Those will be huge selling features for our clients.
We know the Hybrid Long Term Care Insurance market better than any firm in the country and are licensed in all 50 States. If you’d like to learn more about the Nationwide CareMatters II product or any of the other companies simply click on this link for your Free Quotes.