June 19, 2023
The Nationwide CareMatters Together policy is finally here! It feels like we have been awaiting the release of this new joint life cash indemnity LTC policy for an eternity. And at first glance, the benefits and the pricing of this CareMatters Together policy is certainly worth the wait! I think the policy is terrific.
(In conjunction with the release of this new joint CareMatters Together policy, Nationwide has also implemented a rate decrease on pricing within its individual CareMatters policy series to more favorably compete with the Securian SecureCare III policy)
Until today, the only joint hybrid life policy with long term care extension of benefits has been the OneAmerica Asset Care policy. Of course, the OneAmerica Asset Care calling card has always been Unlimited Lifetime long term care extension of benefits. OneAmerica Asset Care, however is a reimbursement model.
For years, many of my clients have asked about the possibility of buying a joint life cash indemnity long term care policy.
Why joint life? Well, the joint life insurance aspect can save you premium when compared with purchasing two individual policies with two death benefits.
And why cash indemnity? Well, when compared with reimbursement models, cash indemnity policies may provide you with more flexibility and ease of use for caregiving expenses.
With cash indemnity policies you are not required to submit receipts for paid care for reimbursement once your long term care insurance claim has been approved. You may use your policy benefits how you wish, without restrictions.
Additionally, anyone may be your caregiver with indemnity policies, including family and friends.
So, within the industry we have been excitedly awaiting the release of this CareMatters Together policy from Nationwide for well over a year wondering what will it offer and how will it be priced.
Now, CareMatters Together will still be a limited benefit period policy, as are the Care Matters II individual policy offerings.
Nationwide will not be offering you the Lifetime Unlimited LTC benefits on this joint policy as the OneAmerica Asset Care policy will offer you. (Unlimited benefits with cash indemnity sure would be nice though. We can dream but it will never happen!)
On this CareMatters Together policy, Nationwide will allow you to share up to a maximum benefit period of 8 years (96 months) of total joint coverage. Shared benefit pools of 4 years and 6 years are also options.
This policy is fairly easy to understand. There is one pool of money for both people being insured that can be used in any combination of benefit payments. So, with an 8 year LTC benefit pool of money, one partner could use up the entire 8 years of insurance benefits, or it could be split up 7 years/1 year, 6 years/2 years, 5 years/3 years. However it works outs for you.
While I definitely would have preferred a slightly longer shared benefit pool as an option for you, 8 years of shared coverage isn't too bad. And the pricing for this CareMatters Together policy for what it is offering is very good, I believe.
So let's review together the benefits, the options, and the pricing of this new Nationwide joint cash indemnity LTC policy, shall we.
Nationwide Care Matters Together Policy Highlights
Nationwide CareMatters Together is designed to provide long-term care coverage via a linked-benefit policy to couples or to two individuals with an insurable interest in each other.
Nationwide CareMatters Together offers a shared pool of benefit dollars. Insureds can each use some or all of their shared benefit pool as best fits their situation. LTC benefits can be paid to both insureds simultaneously if each insured is on claim.
And like all Nationwide LTC solutions the CareMatters Together benefit is cash indemnity. This means that Nationwide places no restrictions on how your benefits are used.Product Highlights:
- · Designed for couples ages 30 to 70
- · Shared pool of long-term care benefits
- · Guaranteed premiums, accrued benefits and LTC benefits
- · Guaranteed second-to-die death benefit
- · Cash indemnity long-term care benefit
(available in all states today except California, District of Columbia, Montana, Arizona and New York)
Monthly LTC Benefit Amount Initial Issue Limits
- $1,500 Month Minimum at Issue (Vermont $2325, Wisconsin $1860)
- $20,833 Month Maximum at Issue
Maximum Number of Shared LTC Benefit Payments
- 48 months
- 72 months
- 96 months
Monthly LTC Benefit Inflation Protection Options
- 3% Compound For 20 Years
- 3% Compound For Life
- 5% Compound For Life
Premium Payment Options
- Single Pay
- 5 Pay
- 10 Pay
- 20 Pay
- Pay To 100 of Older Insured
Waiver of Premium
Life insurance and LTC Insurance premiums are waived while the insured is on claim
90 calendar days for each insured going on claim Each insured will have their own elimination period. Upon completion of the elimination period, benefits for the first 90 days will be paid retroactively along with benefits for month 4. So, on day 91, benefits for month 1, month 2, month 3 and month 4 will be paid to you.
Benefits are payable internationally however they are limited to 36 full monthly payments. Upon return to the United States benefits past 36 payments will resume.
Guaranteed Minimum Death Benefit
In the event the specified amount of life insurance benefit has been entirely exhausted due to long term care claims paid out, an amount equal to 10% of the specified amount of life insurance will be paid out at upon the 2nd death of the insureds.
Potential Tax Advantages
The LTC insurance premium component that is separately identifiable may be eligible for a tax deduction or reimbursement from a health savings account (HSA).
Care Coordination Benefits
- Help with filing your claim for benefits
- Creating your plan of care that is appropriate for you
- Finding local care services and the right facility for your needs
- Providing you with ongoing support as your needs change
So, now that we have an overview of the product highlights let's take a deep dive into the pricing of this new joint life policy for a range of ages and for a range of payment plans.
This CareMatters Together policy is available for ages 30 - 70.
Let's look at comprehensive pricing for couples ages 45, 55 & 65. These ages will comprise most of the buyers today.
For the benefit period option, I am going to almost always recommend 8 years of shared joint coverage.
While you can consider the shared benefit period options of 4 years and 6 years to save premium, I am going to illustrate 8 years of shared coverage for the purposes of this review. With two insureds, I certainly will feel more comfortable with my clients having 8 years of coverage if needed. I am currently experiencing long term care needs for three family members. My father has Parkinson's and will need to be in a nursing home for the rest of his life, while my step mother is battling dementia and also will need 24/7 care. My mother-in-law is in assisted living presently. Each of them could need care for many many years. You may read on the internet that an "average" need for long term care is 3 years. Well, life does not always work out in averages. In my professional opinion, the 8 years shared benefit pool option will certainly be the place to start on this Nationwide CareMatters Together policy. We can always scale down if needed, but for now let's review the 8 year joint policy pricing.
Just to provide you with a feel for the pricing of this policy, let's use an initial long term care monthly benefit of $6000 month with the 3% compound Lifetime inflation protection option. This will generally be your best inflation protection option to include with this CareMatters Together policy,
Now, keep in mind, you can buy as much or as little initial long term care monthly benefit as you like to meet your planning objectives.
For reference, we are currently spending $8800 month for my mother-in-law's assisted living costs.
Benefits and premiums do have a pro rata relationship. So, with the premiums below for the initial $6000 monthly long term care benefit, you will actually be able to solve for any initial monthly LTC benefit amount.
For example, an initial $7500 monthly LTC benefit will need 25% additional premium than the $6000 premium amounts because $7500 equals $6000 x 1.25. An initial $4500 monthly LTC benefit will be 25% less premium for you ($6000 x .75 = $4500)
So, let's look at the shared 8 year pool pricing for a $6000 initial monthly benefit for age 45, age 55, and age 65 year old couples and compare your joint policy premiums to the pricing of the individual policies so you can see the pros and cons of buying this joint life CareMatters Together policy.
***Quick Note: All of the pricing in this blog uses illustration examples for a couple of 1 man, 1 woman***
Long term care insurance has gender-based pricing. Women will have higher rates than men.
For your purposes if you are part of a same-sex couple:
For the rates below, if you are a same-sex male couple, discount the illustrative premiums within my blog by 18%. If you are a same-sex female couple, increase the premiums within my blog by 18%.
Nationwide CareMatters Together Costs for 45 Year Old Couples
$6000 month, 96 months shared, 3% compound lifetime inflation; $216,000 guaranteed life insurance benefit
Single Pay: $130,791 illustration
5 Pay: $27,534 illustration ($137,670 premium over 5 years)
10 Pay: $15,429 illustration ($154,290 premium over 10 years)
20 Pay: $9,891 illustration ($197,820 premium over 20 years)
Pay To 100: $7,421 illustration
To familiarize you with the amount of long term care insurance benefits you would derive with this policy design here is a schedule of payouts at future ages with factoring in your annual 3% compounded inflation protection benefit increase factor:
Age 45: $6,000 monthly LTC benefit per insured, $640,248 Total Shared Benefit Amount
Age 55: $8,053 monthly LTC benefit per insured, $860,440 Total Shared Benefit Amount
Age 65: $10,837 monthly LTC benefit per insured, $1,156,359 Total Shared Benefit Amount
Age 75: $14,564 monthly LTC benefit per insured, $1,554,050 Total Shared Benefit Amount
Age 85: $19,572 monthly LTC benefit per insured, $2,088,514 Total Shared Benefit Amount
So, if you are 45 years old you can leverage a single premium deposit of $130,000 into $2,000,000 of tax free long term care insurance when you are in your mid 80's. And if you do not need care, your estate will receive your $216,000 life insurance benefit.
And if you would prefer to spread premiums out over 5 years, 10 years, 20 years or to Age 100, these installment options exist for you, as well.
What About The Pay To 100 Option?
Generally I prefer for my clients to elect installment plans as short as possible to not only save premium, and also to achieve a Paid-Up Status in a reasonable period of time. It is generally helpful for you to see a finish line, if possible. I have always leaned towards recommending premium payment options of 10 years or less, if your budget allows.
Normally, I would not be a fan of a "Pay to 100" approach.
That said, this Nationwide Pay to 100 pricing really caught my eye.
Historically, payment for life approaches are typically elected by traditional LTC insurance buyers.
This Nationwide CareMatters Together pricing, however, is a shot across the bow to traditional LTC insurance underwriters.
To wit, currently, the premium with the leading traditional underwriter Mutual of Omaha for a policy with benefits of $6000 month, 8 years shared, and 3% compound inflation protection is $7164.55.
Now remember: Unlike hybrid LTC insurance policies such as Nationwide CareMatters, traditional LTC insurance premiums are non-guaranteed. Traditional LTC Insurance policies have no cash value or death benefit.
Mutual of Omaha is asking $7164 annually for life, and Mutual of Omaha can increase the premium with a request filed with your state insurance commissioner.
Nationwide CareMatters Together is offering you a guaranteed premium of $7421, and a guaranteed death benefit of $216,000.
Would any reasonable person apply today for a traditional LTC policy that offers the risk of rate increases over your lifetime and has no cash value for essentially the same premium as a guaranteed premium hybrid LTC policy with cash value?
Not a chance!
This Nationwide CareMatters Together policy has officially killed the traditional LTC insurance industry.
Date of Traditional LTCi Death 06/12/2023.
Should You Buy Joint Life or Individual Life Hybrid LTC Policies?
So, this is the really important question for you with this Nationwide CareMatters Together policy. If you are comfortable with a limited benefit period of 8 years, for example, how much premium are you saving with this joint life policy when compared to buying two individual policies with the same monthly LTC benefits and inflation protection.
To help you to compare your options, let's look at the individual policy pricing with two leading cash indemnity policies, Securian Secure Care III and Nationwide CareMatters II.
Securian Secure Care III
6 years each: male age 45 $69,368, female age 45 $81,034
7 years each: male age 45 $73,742, female age 45 $88,550
8 years each: male age 45 $77,131, female age 45 $94,337
Nationwide CareMatters II
6 years each: male age 45 $70,927, female age 45 $83,360
7 years each: male age 45 $72,586, female age 45 $89,032
8 years each: unavailable
Nationwide CareMatters Together
4 years Shared: $100,978
6 Years Shared: $118,969
8 Years Shared: $130,791
So, you can see the shared 8 year policy will cost you premium of $130,000, while buying two individual policies of 6 years each will cost approximately $150,000; two individual policies of 7 years each will cost $161,000. So, you would have a 20% -25% higher premium outlay with the individual policies, however with your individual policies you would retain life insurance benefits totalling $288,000 ($144,000 per policy) compared with $216,000 within the joint life insurance policy. You would also have a greater likelihood of recouping a life insurance benefit in addition to receiving long term care benefits with the two individual policies, whereas the joint life insurance benefit is exposed to the risk of two insureds, either of whom may need long term care to offset its value for you.
Thus, I could certainly make a case for you to still consider two individual policies with two individual death benefits for slightly more premium, however I absolutely expect that this new Nationwide joint life option will be highly attractive within the marketplace.
Below we will have the pricing for 55 year old couples and 65 year old couples. If you are 45 years old, these numbers below will also help you to see the advantages of moving forward to fund your plan when you are younger, if possible. Not only are your premiums lower, but also the growth of your benefits have more time to compound. Additionally, it is easier to health qualify when you are younger, as well.
Nationwide CareMatters Together Costs for 55 year Old Couples
I receive the majority of my inquiries from couples in the mid-50's. I am age 57 myself, and it is certainly understandable why many of us that are in our fifties are highly concerned with long term care planning.
If your experiences are anything like mine you might be knee-deep in the caring of your aging parents today. For many of us in our 50's, our parents are now in their 80's and are needing care. My father has Parkinson's, my mother-in-law has a cognitive impairment and is in assisted living, and my step-mother has severe dementia. Caring for our aging parents, I believe, is the catalyst for many of us to begin to plan for our care so we do not burden our family with these issues as we grow older.
Here are the premiums for the CareMatters Together policy for 55 year old couples for benefits of $6000 month with inlfation protection.
You will see that the premiums are still very affordable at this age, and the leverage you will receive with future long term care benefits is excellent.
$6000 month, 96 months shared, 3% compound lifetime inflation; $216,000 guaranteed life insurance benefit
Single Pay: $165,313 illustration
5 Pay: $35,199 illustration ($175,585 premium over 5 years)
10 Pay: $19,751 illustration ($197,510 premium over 10 years)
20 Pay: $12,734 illustration ($254,680 premium over 20 years)
Pay To 100: $10,340 illustration
To familiarize you with the amount of long term care insurance benefits you would derive with this policy design if you are a 55 year old couple here is a schedule of long term care insurance payouts at future ages with factoring in your annual 3% compounded inflation protection benefit increase factor:
Age 55: $6,000 monthly LTC benefit per insured, $640,248 Total Shared Benefit Amount
Age 65: $8,053 monthly LTC benefit per insured, $860,440 Total Shared Benefit Amount
Age 75: $10,837 monthly LTC benefit per insured, $1,156,359 Total Shared Benefit Amount
Age 85: $14,564 monthly LTC benefit per insured, $1,554,050 Total Shared Benefit Amount
You can expect to leverage a single pay premium of $165,000 today into $1.5 million tax free in your mid 80's. You will probably find this to be a highly attractive solution to mitigate your risk of needing to receive long term care.
While I have mentioned that I strongly prefer keeping your shared benefit period as long of a duration as possible, here would be your premiums should you elect to shorten the duration of your benefit period from 8 years to 6 years or 4 years, while keeping your initial LTC monthly benefit at $6000 with 3% compound inflation protection.
Age 55, $6000 month, 4 year shared benefit period, 3% compound inflation for Lifetime
Single Pay premium $131,832 CareMatters Together illustration 4 years
Age 55, $6000 month, 6 year shared benefit period, 3% compound inflation for Lifetime
Single Pay premium $152,373 CareMatters Together illustration 6 years
Age 55, $6000 month, 8 year shared benefit period, 3% compound inflation for Lifetime
Single Pay premium $165,313 CareMatters Together illustration 8 years
Now let's take a look at the numbers for 65 year old clients.
Nationwide CareMatters Together Costs for 65 Year Old Couples
Here are the premium schedules for you if you are a couple that is 65 years old.
$6000 month, 96 months shared, 3% compound lifetime inflation; $216,000 guaranteed life insurance benefit
Single Pay: $220,025 illustration
5 Pay: $47,488 illustration ($237,440 premium over 5 years)
10 Pay: $26,802 illustration ($268,020 premium over 10 years)
20 Pay: $17,866 illustration ($357,320 premium over 20 years)
Pay To 100: $16,593 illustration
Obviously looking at these numbers above, I would imagine most 65 year olds would elect to fund this plan within 10 years. Many of my 65 year old clients elect the single pay option.
To familiarize you with the amount of long term care insurance benefits you would derive with this policy design if you are a 65 year old couple here is a schedule of long term care insurance payouts at future ages with factoring in your annual 3% compounded inflation protection benefit increase factor:
Age 65: $6,000 monthly LTC benefit per insured, $640,248 Total Shared Benefit Amount
Age 75: $8,053 monthly LTC benefit per insured, $860,440 Total Shared Benefit Amount
Age 85: $10,837 monthly LTC benefit per insured, $1,156,359 Total Shared Benefit Amount
Here are the single pay numbers for 65 year old couples with shorter shared benefit period durations
Age 65, $6000 month, 4 year shared benefit period, 3% compound inflation for Lifetime
Single Pay premium $180,928 CareMatters Together illustration 4 years
Age 65, $6000 month, 6 year shared benefit period, 3% compound inflation for Lifetime
Single Pay premium $205,331 CareMatters Together illustration 6 years
Age 65, $6000 month, 8 year shared benefit period, 3% compound inflation for Lifetime
Single Pay premium $220,025 CareMatters Together illustration 8 years
Now, the other question you might be asking yourself is what does it cost in additional premium to go longer, not shorter in duration with an alternative joint life hybrid LTC policy?
What might it cost you in premium as a 65 year old couple to buy the joint Unlimited lifetime benefit period LTC policy with OneAmerica?
Should You Consider An Unlimited Joint Life Hybrid Long Term Care Policy?
So, this new Nationwide CareMatters Together policy is the 2nd available joint life hybrid LTC policy. For 35 years OneAmerica has offered the uber popular joint life Asset Care policy with Lifetime LTC benefits as an option.
I am sure you would agree that Lifetime Unlimited benefits should cost more premium than an 8 year shared benefit period.
So, I realize this is an apples and oranges conversation to have with you. But, it might be worthwhile for you to also have a feel for how your premium moves if you obtain longer LTC coverage to mitigate your risk entirely.
So, what would your single pay premium be for the OneAmerica joint life Asset Care policy for a reasonable plan design?
Here are two examples of a joint life OneAmerica Asset Care policy with Lifetime LTC benefits for you.
The OneAmerica Asset Care joint policy illustrates better without inflation protection, so I have moved your initial $6000 monthly benefit higher to build in the inflation protection component upfront to account for your care being needed in your 80's.
Here are two illustrations for level benefits of $9000 month per person and $10,000 month per person.
The Nationwide CareMatters Together policy's illustrative $6000 initial monthly benefit with 3% compound inflation will reach $9000 month at age 79, and $10,000 month at age 83.
OneAmerica $9000 monthly LTC benefit each, Unlimited LTC benefits; $300,000 life insurance benefit
Single pay premium $244,863 Asset Care $9000 month illustration
OneAmerica $10,000 monthly LTC benefit each, Unlimited LTC benefits; $333,333 life insurance benefit
Single pay premium $272,070 Asset Care $10,000 month illustration
So, Nationwide is at $220,000 for an 8 year shared benefit period, with a $6000 monthly benefit growing by 3% compound.
OneAmerica is at $244,000 - $272,000 for Lifetime unlimited monthly benefits ranging from $9000 to $10,000 month per person.
(I actually could see a lot of 65 year old couples choosing the Unlimited OneAmerica Asset Care option here!)
Nationwide CareMatters Together Underwriting Considerations - What You Need To Know
I want you to be aware of the Nationwide CareMatters Together underwriting categories so that you fully understand your underwriting outcomes and the offers you may receive.
The individual Nationwide CareMatters policy series has always only had one health classification for all approved applicants, only distinguishing between non-tobacco and tobacco users.
Nationwide now has two underwriting classifications on this CareMatters Together joint policy.
You will note that all of my CareMatters Together illustrations linked within this blog state Preferred Non-Tobacco for the health classification.
The Preferred classification encompasses all applicants that would otherwise be approved on the Nationwide CareMatters individual policy series.
"Preferred" is essentially now Nationwide's standard health classification for CareTogether applicants healthy enough to be approved historically.
Receiving the "Preferred" classification is not receiving a discount form Nationwide. You are not being rewarded. You are simply being approved as applied for.
The "Standard" classification newly introduced on this Nationwide CareMatters Together policy is actually a sub-standard health category.
This sub-standard health classification will be reserved for CareMatters Together applicants with significant adverse health conditions as an alternative to being declined.
Nationwide will only allow one CareMatters Together applicant to be placed within this new Standard category.
If you apply to Nationwide as a couple and one of you does receive a Standard offer, your joint CareMatters Together premium will be increased by 50%-55%.
Needless to say, an offer with an additional 50%-55% required premium should be thoroughly discussed with your insurance agent, and almost certainly should be shopped around with alternative LTC underwriters by your agent purely to exercise due diligence to confirm that you are being treated fairly and your required increased premium is warranted for your health history.
I can promise you that if I receive a Standard offer from Nationwide for any of my clients on this joint Nationwide CareMatters Together policy, I will be immediately calling my underwriters at Securian, OneAmerica, Brighthouse, et al for 2nd opinions.
If your agent tries to intimate that this Standard category is not a sub-standard offer, you should probably leave your agent.
And immediately call me.
Nationwide CareMatters Together Underwriting Process
Nationwide has a streamlined underwriting process to be approved for coverage.
You will be required to complete a health interview, either by phone or digitally. Once Nationwide reviews your health interview, it can either approve your application, or it can elect to order medical records to more fully evaluate your application.
You will not be required to have a physical exam, or submit any lab work to underwriting.
It is a fairly easy process.
Once approved for coverage, with policy issue premium is to be paid within 30 days.
If you require greater than 30 days to accumulate funds, Nationwide will hold your policy for issue until you are ready to make payment.
Nationwide CareMatters Together Conclusions
I believe this policy will be a home run for Nationwide.
The Shared Benefit rider has always been uberly popular with traditional LTC policy applications, with traditional LTC policies being designed around benefit pool designs of 6 years, 8 years and 10 years and 12 years.
Nationwide has elected to cap its exposure at a shared benefit of 8 years.
Do I wish Nationwide pushed the envelope and offered 10 years shared? Absolutely! With the long tail risk of Alzheimer's and dementia claims, a 10 year shared pool would be hugely demanded to mitigate long tail risk with two insureds.
Still, for the initial introduction of this joint life CareMatters Together policy series, I am very happy with its pricing and with its simple design.
Too often, insurance companies provide too many choices to complicate the decision making process with long term care policies.
Insurance marketing departments have a hard time getting out of their own way.
This CareMatters Together policy is designed simply and efficiently by Nationwide.
Select a monthly LTC benefit amount, select one of 3 benefit period options, and select an inflation protection factor (with everyone almost always electing 3% compound lifetime as priced).
Kudos for Nationwide for focusing on simplicity with its design.
In fact, a home run might be selling this CareMatters Together hybrid policy short. It might be a grand slam.
Receive Free Long Term Care Insurance Quotes and Advice
With 26 years in the business, I have guided thousands of clients nationwide with their long term care insurance buying process. Let me guide you too.
For a free consultation, customized illustrations and personalized advice for all of your long term care insurance planning options, please contact me at (800) 891-5824. Or if easier, please use the link below to my online calendar to schedule a call with me.
Jack Lenenberg, J.D.