CareMatters II Review – Everything You Need to Know About This Policy!

Nationwide offers the CareMatters II product, a hybrid life insurance policy that offers great flexibility:

Long-term care coverage if you need it.
Life insurance death benefits if you don’t need long-term care.
Refund of Premium if you change your mind

In this article, we’ll show you the product highlights to help you make an informed decision.

Overview of CareMatters II

Nationwide developed a flexible alternative to traditional LTC policies with its Care Matters II product.

The CareMatters II is a hybrid (linked benefits) policy that gives you maximum flexibility.

The policy may be used for:

  • Adult Day Care
  • Alternative Care Services
  • Assisted Living
  • Care from Family Members
  • Nursing Home Care
  • Any LTC Services Available Today or Developed in the Future!

A concern consumers had about buying long-term care insurance in the past was buying a policy they may never need.

These hybrid policies have largely replaced the traditional policies offered by CNA LTC, John Hancock, and Genworth.

The target market for this policy is insureds aged 40-65 who want control over future care if needed and have assets they would like to protect from expensive long-term care.

After you read this guide, I’m sure you’ll agree that the Care Matters II policy gives you tremendous flexibility to meet your needs.

CareMatters II Product Details

The CareMatters II is a hybrid life insurance policy – A universal life insurance policy offering long-term care benefits, a death benefit, and Refund of Premium (ROP) features.

Some of the basics of this policy include:

  • Available to insureds Aged 30 – 69.
  • The policy is an indemnity LTC policy
  • Non-tobacco and tobacco rate classes
  • Minimum Face Amount – $60,000 ($74k in South Dakota)
  • Maximum Face Amount – $500,000
  • Elimination Period – 90 days, but retroactive to Day One.
  • Long-Term Care Benefit Periods – 2, 3, 4, 5, 6, or 7 years
  • Payment options – Single pay, five pay, ten pay, pay to age 65, and pay to age 100 are available.
  • Lump sum payments and 1035 exchanges from existing policies are possible.
  • Refund of Premium – We provide greater detail in this guide
  • Inflation Protection – 3% simple, 3% compound, and 5% compound, indexed inflation protection
  • International Benefits for insureds living outside the U.S.
  • Accelerated Death Benefits
  • LTC Extension of Benefits
  • LTC Acceleration Rider

CareMatters II vs. MoneyGuard Fixed Advantage

How does the CareMatters II stack up against the competition?

Here are some highlights vs. other similar products in the market.

Product
Features
Nationwide
CareMatters II
Lincoln Financial
MoneyGuard
Fixed Advantage
Issue Ages30-7040-80
Minimum Face Amount$60,000$50,000
Premium OptionsSingle Pay
5 Year Pay
10 Year Pay
Pay to Age 65
Pay to Age 100
Single Pay
2-10 Years based on age
Inflation Protection3% Simple
3% Compound
5% Compound
No Inflation
3% Compound
5% Compound
LTC Benefit Duration Periods2 – 7 Years3 – 6 Years
Elimination Period90 DaysNo Elimination Period
Residual Death Benefit20% of FaceLesser of 5% of Death
Benefit or $10,000
Refund of PremiumYesYes
Reduced Paid Up BenefitsReduced Paid-Up BenefitsYes
Terminal Illness BenefitsYesYes

Key Features Explained

Depending on the company, LTC benefits are paid out on an indemnity basis, like Nationwide, or a reimbursement basis, like the MoneyGuard Fixed Advantage policy.

Indemnity policies pay your monthly benefit, while reimbursement policies pay for expenses.

Elimination Period – This is the time that must pass once eligible for benefits before the benefit starts paying. With Nationwide, they pay benefits retroactively to Day 1, so the first benefit payment will include the prior 90 days plus the current month!

LTC Benefit Periods – When you purchase LTC coverage, you can choose how long you want to receive benefits from 2-7 years. The longer the benefit period, the more expensive coverage will be.

How long will you need care for? Here’s a great article from Morningstar addressing this exact question.

Payment Options – Nationwide offers more flexibility than other companies regarding paying your premium.

You have a choice of payment options, including:

  • Single Lump Sum
  • 5 Year Pay
  • 10 Year Pay
  • Pay to Age 65 (available for those aged 30-54)
  • Pay to Age 100 (available for those aged 30-65)

In addition, if you have an existing life insurance policy, it may be possible to do a tax-free (1035) exchange of cash values from the existing policy to the new policy.

Refund of Premium (ROP)

If you change your mind about the policy, you have the ability to surrender the policy and receive a refund of your premiums.

The amount of the Refund of Premium depends on several factors, including:

  • The amount you paid into the policy.
  • The current cash surrender value.
  • The length of time you have had the policy.
  • Whether you have taken any withdrawals from the policy.
  • The Refund of Premium option you chose at the time of purchase.
    • One-Time Step ROP Option
    • Minimum ROP and Max LTC Benefit Option
    • Vested ROP Option

One-Time Step ROP – This option returns a set percentage, starting at 80% for policy years 1-10 and 100% for years 11+.

Minimum ROP and Max LTC Options return a lower percentage than the other options but provide a greater LTC benefit. If you know you will never cancel the policy, this option may provide better value to you.

Vested ROP Option – The vested ROP option provides an increasing surrender value starting at 85% in year 1, rising to 100% in year six and beyond.

When we provide you with illustrations, we’ll show you all of these options so you can see how each affects the overall policy.

Inflation Protection

Inflation robs the purchasing power of your dollar. When you buy an insurance policy to provide LTC benefits in the future, you have to consider what medical care may cost.

While none of us have a crystal ball, we can use inflation protection to meet future needs.

The Nationwide Care Matters II policy offers several options to choose from.

  • None – This is the least expensive premium option with zero inflation protection.
  • Simple Interest – 3% is added to the original monthly LTC benefit each year. If your monthly benefit were $1000, every year would add $30. Year two would be $1030 monthly, year three would be $1060, etc.
  • 3% Compound Interest – Your monthly benefit increases by 3% annually. If year one monthly benefit were $1000, year two would be $1030, year three would be $1061 monthly, year four would be $1093, year five would be $1126, etc.
  • 5% Compound Interest – Your monthly benefit increases by 5% annually. If year one monthly benefit were $1000, year two would be $1050, year three would be $1103 monthly, year four would be $1159, year five would be $1167, etc.

Younger insureds have a greater need for inflation protection.

International Coverage

A unique benefit of the Care Matters II policy is the availability of benefits outside the United States.

Up to 100% of the maximum monthly benefit is available for qualifying long-term care expenses.

Accelerated Death Benefits

Terminal Illness – If you have a terminal illness with a life expectancy of 12 months or less, the death benefit may be accelerated to you.

The maximum acceleration available is 50% of the base policy.

Critical Illness – A portion of the death benefit may be accelerated for critical illnesses such as cancer, heart attack, kidney failure, major organ failure, paralysis, stroke, or cardiac arrest.

The amount available is the lesser of 10% of the death benefit or $25,000 per event, with a maximum of 5 claims allowed.

You have the ability to further customize your coverage with riders offered by Nationwide.

Remember that benefits and riders may vary by your state of residence. We’ll provide you with details based on your state.

How Much Does CareMatters II Cost?

There are many variables when it comes to prices for long-term care, such as your age, health, and policy design.

Here’s what we did to give you some basic examples of pricing.

As you will see below in these LTC price charts, the younger you are when you buy LTC, the better the benefits are.

We used a single premium option of $100,000 to compare to MoneyGuard Fixed Advantage.

Age 55 CareMatters II Pricing Examples for Women and Men

Age 55 Female – One-time premium = $100,000 – Standard Underwriting, Refund of Premium Max LTC Benefit, and 3% compound inflation rate – 4-year benefit duration.

Policy
Year
AgeMonthly
LTC Benefit
Total
LTC Benefit
Death
Benefit
Return of
Premium
155$5,934$284,824$142,412$48,094
1165$7,975$400,352$142,412$65,768
2175$10,717$538,040$142,412$87,717
3185$14,403$723,081$142,412$110,549
46100$22,439$1,126,536$142,412$132,081
Florida illustration dated 1-8-2024

Age 55 Male – One-time premium = $100,000 – Standard Underwriting, Refund of Premium Max LTC Benefit, and 3% compound inflation rate – 4-year benefit duration.

Policy
Year
AgeMonthly
LTC Benefit
Total
LTC Benefit
Death
Benefit
Return of
Premium
155$6,410$307,658$153,829$57,168
1165$8,614$432,448$153,829$77,421
2175$11,576$581,174$153,829$101,297
3185$15,558$781,049$153,829$124,531
46100$24,238$1,216,849$153,829$143,144
Florida illustration dated 1-8-2024

Age 60 CareMatters II Pricing Examples for Women and Men

Age 60 Female – One-time premium = $100,000 – Standard Underwriting, Refund of Premium Max LTC Benefit, and 3% compound inflation rate – 4-year benefit duration.

Policy
Year
AgeMonthly
LTC Benefit
Total
LTC Benefit
Death
Benefit
Return of
Premium
160$5,275$253,221$126,610$50,115
665$6,116$307,028$126,610$58,471
1675$8,219$412,620$126,610$77,984
2685$11,046$554,527$126,610$92,283
41100$17,209$863,935$126,610$117,425
Florida illustration dated 1-8-2024

Age 60 Male – One-time premium = $100,000 – Standard Underwriting, Refund of Premium Max LTC Benefit, and 3% compound inflation rate – 4-year benefit duration.

Policy
Year
AgeMonthly
LTC Benefit
Total
LTC Benefit
Death
Benefit
Return of
Premium
160$5,809$278,852$139,426$60,456
665$6,735$338,106$139,432$70,172
1675$9,051$454,386$139,426$91,813
2685$12,164$610,656$139,426$112,871
41100$18,951$951,383$139,426$129,741
Florida illustration dated 1-8-2024

Age 65 CareMatters II Pricing Examples for Women and Men

Age 65 Female – One-time premium = $100,000 – Standard Underwriting, Refund of Premium Max LTC Benefit, and 3% compound inflation rate – 4-year benefit duration.

Policy
Year
AgeMonthly
LTC Benefit
Total
LTC Benefit
Death
Benefit
Return of
Premium
165$4,379$210,171$105,086$48,530
670$5,076$254,831$105,086$56,280
1175$5,884$295,419$105,086$64,726
2185$7,908$397,019$105,086$81,574
36100$12,321$618,542$105,086$97,462
Florida illustration dated 1-8-2024

Age 65 Male – One-time premium = $100,000 – Standard Underwriting, Refund of Premium Max LTC Benefit, and 3% compound inflation rate – 4-year benefit duration.

Policy
Year
AgeMonthly
LTC Benefit
Total
LTC Benefit
Death
Benefit
Return of
Premium
165$4,916$235,951$117,981$59,376
670$5,699$286,088$117,988$68,320
1175$6,606$331,655$117,975$77,687
2185$8,878$445,717$117,975$95,506
36100$13,832$694,412$117,975$109,781
Florida illustration dated 1-8-2024

Whenever you request information, we provide the full company illustrations for you to review and ask questions.

Final Thoughts

Long-term care insurance is complicated. You need to take your time when deciding about this type of coverage.

We have found that it works best when we have a conversation about your goals. We’ll then work on the initial illustrations from companies to show you what the benefits and pricing look like.

We then narrow everything down to the best company for you, and we’ll review additional illustrations to show you the options available for the product you choose.

There’s no pressure or obligation with our service. You can change your mind at any time.

We’ll provide quotes from Nationwide CareMatters II and other companies with similar products.

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