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:

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

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

An example of a traditional LTC policy would be Transamerica TransCare products that were discontinued.

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.

As a side note, Genworth’s subsidiary CareScout is preparing to enter the long-term care insurance market.

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.

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

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 Ages	30-70	40-80
Minimum Face Amount	$60,000	$50,000
Premium Options	Single Pay 5 Year Pay 10 Year Pay Pay to Age 65 Pay to Age 100	Single Pay 2-10 Years based on age
Inflation Protection	3% Simple 3% Compound 5% Compound	No Inflation 3% Compound 5% Compound
LTC Benefit Duration Periods	2 – 7 Years	3 – 6 Years
Elimination Period	90 Days	No Elimination Period
Residual Death Benefit	20% of Face	Lesser of 5% of Death Benefit or $10,000
Refund of Premium	Yes	Yes
Reduced Paid Up Benefits	Reduced Paid-Up Benefits	Yes
Terminal Illness Benefits	Yes	Yes

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.

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 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.

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.

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.

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 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	Age	Monthly LTC Benefit	Total LTC Benefit	Death Benefit	Return of Premium
1	55	$5,934	$284,824	$142,412	$48,094
11	65	$7,975	$400,352	$142,412	$65,768
21	75	$10,717	$538,040	$142,412	$87,717
31	85	$14,403	$723,081	$142,412	$110,549
46	100	$22,439	$1,126,536	$142,412	$132,081

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	Age	Monthly LTC Benefit	Total LTC Benefit	Death Benefit	Return of Premium
1	55	$6,410	$307,658	$153,829	$57,168
11	65	$8,614	$432,448	$153,829	$77,421
21	75	$11,576	$581,174	$153,829	$101,297
31	85	$15,558	$781,049	$153,829	$124,531
46	100	$24,238	$1,216,849	$153,829	$143,144

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	Age	Monthly LTC Benefit	Total LTC Benefit	Death Benefit	Return of Premium
1	60	$5,275	$253,221	$126,610	$50,115
6	65	$6,116	$307,028	$126,610	$58,471
16	75	$8,219	$412,620	$126,610	$77,984
26	85	$11,046	$554,527	$126,610	$92,283
41	100	$17,209	$863,935	$126,610	$117,425

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	Age	Monthly LTC Benefit	Total LTC Benefit	Death Benefit	Return of Premium
1	60	$5,809	$278,852	$139,426	$60,456
6	65	$6,735	$338,106	$139,432	$70,172
16	75	$9,051	$454,386	$139,426	$91,813
26	85	$12,164	$610,656	$139,426	$112,871
41	100	$18,951	$951,383	$139,426	$129,741

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	Age	Monthly LTC Benefit	Total LTC Benefit	Death Benefit	Return of Premium
1	65	$4,379	$210,171	$105,086	$48,530
6	70	$5,076	$254,831	$105,086	$56,280
11	75	$5,884	$295,419	$105,086	$64,726
21	85	$7,908	$397,019	$105,086	$81,574
36	100	$12,321	$618,542	$105,086	$97,462

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	Age	Monthly LTC Benefit	Total LTC Benefit	Death Benefit	Return of Premium
1	65	$4,916	$235,951	$117,981	$59,376
6	70	$5,699	$286,088	$117,988	$68,320
11	75	$6,606	$331,655	$117,975	$77,687
21	85	$8,878	$445,717	$117,975	$95,506
36	100	$13,832	$694,412	$117,975	$109,781

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

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.

Some states have programs to consider like the California Long-Term Care Insurance Program.

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.