Nationwide offers a very unique long term care insurance policy in the marketplace. The Nationwide YourLife CareMatters policy is a hybrid linked-benefit policy that offers you cash indemnity LTC benefits.
Hybrid linked-benefit LTC policies are increasingly popular today. Unlike traditional long term care insurance policies that have rising premiums and the "use it or lose it" risk proposition, hybrid long term care policies provide you with long term care benefits for guaranteed premiums and you are comforted in knowing that your premium will be recovered in one of the following ways:
- Long term care benefits for you
- Life insurance benefit for your heirs
- A combination of long term care benefits and life insurance benefits
- A return of your premium should you change your mind and cancel your policy
What sets Nationwide YourLife CareMatters apart from other long term care insurance policies?
Nationwide offers you cash indemnity long term care benefits that can be used for your comprehensive long term care needs such as home care, assisted living, nursing home care, adult day care, hospice care, informal care and alternative care needs.
With cash indemnity benefits:
- Your full monthly benefit is paid to you every month
- Your benefits can be used to cover whatever you need for care, even if your long term care expenses are less than your monthly benefit amount
- Informal caregivers, including your family and friends, can be paid to provide care for you
By contrast all other hybrid linked-benefit policies in the marketplace currently offer reimbursement benefits.
With reimbursement benefits you must submit your receipts for your qualified long term care expenses to the insurance company and you are subsequently reimbursed for your approved expenses.
Nationwide YourLife CareMatters Benefit Options
The policy design of Nationwide CareMatters is similar to other long term care insurance policies. To build your plan you decide upon your long term care monthly benefit, benefit period and inflation protection.
Your choices are:
Benefit period - 2 years, 3 years, 4 years, 5 years, 6 years, 7 years
Monthly benefit - Typically $1500-$15000 depending upon elected benefit period and life insurance benefit
Elimination period: 90 calendar days
Inflation protection: 3% simple or 5% compound
Premium payment options: Single Premium, 5 Pay, 10 Pay
Nationwide YourLife CareMatters offers additional benefits as well.
Residual death benefit: 20%. Should you exhaust your entire death benefit for your long term care needs, nationwide will still provide your beneficiaries with a residual death benefit equal to 20% of your specified amount.
Return of Premium: Subject to vesting schedule 85% year 1, 88% year 2, 91% year 3, 94% year 4, 97% year 5. 100% year 6+.
Is Nationwide CareMatters priced competitively with other combination long term care policies?
The leading hybrid long term care policies today are Lincoln Moneyguard, State Life Asset Care, Pacific Life Premier Care and Genworth Total Living Coverage. Lincoln, State Life, Pacific Life and Genworth are all reimbursement policies. Nationwide offers cash indemnity benefits. So, due to the advantage of indemnity benefits if Nationwide Care Matters is priced competitively with these alternative long term care insurance policies the Nationwide hybrid LTC policy will be worth considering.
To keep the analysis simple, for this case study we will compare 3 hybrid LTC policies offered by A+ rated (AM Best) insurance companies: Lincoln Moneyguard, Pacific Life Premier Care, and Nationwide Care Matters.
State Life is also rated A+ (AM Best) however the State Life Asset Care policy provides Unlimited long term care benefits which neither of these 3 underwriters will match, and State Life Asset Care also specializes in joint policies for couples or siblings. So although the State Life Asset Care policy might be the overall best valued hybrid policy--especially for 2 applicants applying together for coverage-- I will not include the State Life Asset Care policy in this case study at the moment.
Genworth is rated A- so I have not included Genworth in this case study.
Case Study: Combination life insurance with linked long term care benefits
Male, Ohio resident, Married, Age 60. Non-Smoker
$100,000 Single Premium Payment
6 year long term care benefit period
|Company||LTC Benefit||Age 80||Age 90|
|Lincoln (Basic)||$5,808 @ 3% Compound||$10,490||$14,098|
|Lincoln (Vested)||$5,127 @ 3% Compound||$9,259||$12,444|
|Pacific Life||$5,670 @ 3% Simple||$9,072||$10,773|
|Nationwide||$4,450 @ 3% Simple||$6,986||$8,321|
In comparing the inflation adjusted long term care benefits for a 60 year old male applicant, married, non-smoker, the Nationwide Care Matters policy will provide you with significantly less long term care benefits than either the Lincoln Moneyguard II policy or the Pacific Life Premier Care policy. The Lincoln Moneyguard II policy, (either the Basic 80% Return of Premium option or the Vested 100% Return of Premium option, will provide the greatest benefit primarily due to its advantage of providing you with 3% compound inflation protection. The 3% simple inflation protection option will greatly erode the future value of your Nationwide long term care benefit over time.
Thus, from a value standpoint, the Nationwide Care Matters cash indemnity policy will provide you with 30%-50% less monthly long term care benefit per premium dollar of deposit than will alternative reimbursement hybrid long term care policies.
Other costs to consider with the Nationwide CareMatters LTC policy
Additionally, the Nationwide policy requires a 90 day elimination period (deductible) before you begin to receive your benefits. The Lincoln Moneyguard II policy does not have any elimination period, whatsoever. You receive your benefits on Day 1 for care received in all settings with Lincoln Moneyguard II. So, the desire for you to have indemnity benefits that Nationwide will offer to you will not be provided to you without a cost.
Here are the sample illustrations for the hypothetical 60 year old married male applicant, Ohio resident.
Now let's take a look at benefits for a 60 year old female applicant.
|Company||LTC Benefit||Age 80||Age 90|
|Lincoln (Basic)||$5,264 @ 3% Compound||$9,508||$12,777|
|Lincoln (Vested)||$4,560 @ 3% Compound||$8,235||$11,067|
|Pacific Life||$4,822 @ 3% Simple||$7,715||$9,162|
|Nationwide||$4,164 @ 3% Simple||$6,538||$7,787|
The benefits for female applicants are also markedly better with alternative hybrid long term care policies, specifically Lincoln Moneyguard II.
.........And what about the joint State Life Asset Care policy that offers you Unlimited long term care benefits?
If we include the aforementioned State Life Asset Care policy into the mix our hypothetical 60 year old married Ohio couple will really do better with their deposit of $100,000 per person ($200,000 cumulative deposit)
|Company||Age 60||Age 80||Age 90|
|State Life Joint||$11,000 each Unlimited||$11,000 each Unlimited||$11,000 each Unlimited|
|Nationwide Mr.||$4,450 6 years||$6,986 6 years||$8,321 6 years|
|Nationwide Mrs.||$4164 6 years||$6538 6 years||$7,787 6 years|
Nationwide YourLife CareMatters long term care insurance policy conclusions
Cash indemnity benefits for long term care insurance policies is certainly an attractive option. All benefits being equal, you would certainly prefer a cash policy over a reimbursement policy to eliminate your need for submitting bills and receipts.
However as Barney Schwalberg, my Economics professor at Brandeis University, taught me on my first day of Economics 2A class:
There is no such thing as a free lunch!
And that is certainly the case with this Nationwide CareMatters life/long term care insurance policy.
In analyzing the benefits of the leading hybrid Life/LTC policies your payout with the reimbursement models such as Lincoln Moneyguard and State Life Asset Care will be significantly greater than your payout will be with Nationwide CareMatters.
Thus, your decision on whether or not to opt for the flexibility of the Nationwide CareMatters cash indemnity model will be for you to determine for yourself how important cash indemnity benefits are for your specific situation. You could reach the conclusion it is worthwhile for you to simply submit receipts and have access to 40%-60% more coverage for your same premium dollars. Certainly, should your need for care take place within a setting such as assisted living or a nursing home, a reimbursement model will serve your needs equally as well as a cash indemnity model. A cash indemnity model might be helpful for you should you be receiving home care and your care is provided by family members that might otherwise not be covered under reimbursement models.
Receive customized long term care insurance illustrations and analysis
Should you wish to explore your personal options please contact me to receive customized illustrations. As an independent agent I will provide quotes for you for all of the leading long term care insurance underwriters including Nationwide Financial, Lincoln Moneyguard, Pacific Life, Genworth, OneAmerica/State Life, Mass Mutual, New York Life, Northwestern Mutual, Mutual of Omaha, Transamerica, John Hancock, LifeSecure and more.
Call me directly at (800) 891-5824 with any long term care insurance policy questions or for assistance.
Jack Lenenberg, Owner