Nationwide offers a somewhat 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?
So what is the Nationwide selling proposition to you? Well, it is cash.
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, many hybrid linked-benefit policies in the marketplace currently offer reimbursement benefits not cash indemnity.
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.
So, cash indemnity benefits will remove the hassle for you of submitting receipts for reimbursement. Additionally, cash policies will provide you with flexibility to use your benefits as you wish, such as paying for informal caregiving provided by family or firends for example, or for ancillary incidental expenses that might not otherwise be covered by a policy such as transportation, medication, etc.
Sounds great so far.
So, Nationwide CareMatters might be a good option option if the price is decent?
(Spoiler Alert---Nationwide CareMatters is just not a fair priced option--keep reading)
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?
Lincoln, OneAmerica/State Life, Pacific Life are reimbursement policies, although Pacific Life has a reduced payout indemnity option (80%).
Securian and Nationwide each offer 100% cash indemnity benefits.
So, due to the advantage of 100% cash indemnity benefits if Nationwide Care Matters is priced competitively with these alternative long term care insurance policies (especially the Securian policy) the Nationwide hybrid LTC policy will be worth considering by you.
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, Securian SecureCare, 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.
Case Study: Combination life insurance with linked long term care benefits
Male, 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)||$5,452 @ 3% Compound||$9,846||$13,232|
|Securian/Minnesota Life||$5,462 @ 3% Compound
$3958 @ 5% compound
|Nationwide||$2867 @ 5% compound
$4049 @ 3% simple
In comparing the inflation adjusted long term care benefits for a 60 year old male applicant, married, non-smoker, you can see clearly the Nationwide Care Matters policy will provide you with significantly less long term care benefits than either the Lincoln Moneyguard II reimbursement policy or the 100% cash indemnity Securian/Minnesota Life policy.
Consider that the Securian SecureCare policy is also 100% cash indemnity like Nationwide CareMatters, yet the Securian policy provides you with 45% more benefits. 45%!
Thus, from a value standpoint, the Nationwide Care Matters cash indemnity policy is very much overpriced and out of its league today.
Here are the sample illustrations for the hypothetical 60 year old married male applicant
Might benefits for women be better??
Now let's take a look at benefits for a married 60 year old female applicant.
|Company||LTC Benefit||Age 80||Age 90|
|Lincoln||$4,832 @ 3% Compound||$8,727||$11,729|
|Securian/Minnesota||$4,842 @ 3% Compound||$8,745||$11,067|
|Nationwide||$3,831 @ 3% Simple||$6,015||$7,164|
Same result for female applicants. Nationwide is still 45% more expensive than the leading long term care policies.
.........And what about the joint State Life Asset Care policy that offers you Unlimited long term care benefits?
If we include the aforementioned OneAmerica/State Life Asset Care policy into the mix our hypothetical 60 year old married 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||$6424 each Unlimited||$11,265 each Unlimited||$15,136 each Unlimited|
|Nationwide Mr.||$2867 6 years||$7247 6 years||$11,804 6 years|
|Nationwide Mrs.||$3831 6 years||$6014 6 years||$7164 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 indemnity 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! (Unless you are eating at Securian/Minnesota Life)
And that is certainly the case with this Nationwide CareMatters life/long term care insurance policy.
Nationwide is grossly overpricing its CareMatters policy when compared with the marketplace.
In analyzing the benefits of the leading hybrid Life/LTC policies your payouts with either the 100% cash indemnity policy through Securian/Minnesota Life, or with reimbursement policies such as Lincoln Moneyguard II and State Life Asset Care will be significantly greater than with Nationwide.
Thus, if you want the flexibility of cash that Nationwide CareMatters will offer you, then do yourself a favor and go straight to Securian Financial and save yourself 45%.
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 Lincoln Moneyguard, Pacific Life, Securian/Minnesota Life, OneAmerica/State Life, Mass Mutual, New York Life, Northwestern Mutual, Mutual of Omaha, Transamerica, Thrivent and more.
Call me directly at (800) 891-5824 with any long term care insurance policy questions or for assistance.
Jack Lenenberg, Owner