You may be familiar with Nationwide because of its commercial jingle and celebrity spokespeople. Here is an overview of the company’s long-term care coverage, which includes a life insurance rider and a hybrid policy.
Read on to learn if Nationwide is the right solution for your long-term care planning needs.
Nationwide LTC pros & cons
Pros
- Its long-term care coverage has flexibility, with three payment options, four inflation provisions, and six different benefit periods.
- All of Nationwide’s long-term care products pay a cash indemnity benefit. You do not have to submit bills or receipts to be reimbursed. You’ll receive a monthly benefit that you can spend without restrictions.
- In addition to funding traditional long-term care treatments, Nationwide enables you to use benefits to pay family members or less expensive unlicensed caregivers to provide care.
Cons
- The company does not offer a standalone long-term care insurance policy.
- The company only offers a 90-day elimination period.
- While Nationwide is a mutual insurance company owned by policyholders, its policies do not pay dividends to policyholders.
Nationwide CareMatters
While Nationwide does not offer a standalone long-term care insurance policy, it does offer a long-term care rider that can be added to its universal life products.
Adding a long-term care rider to a Nationwide life insurance policy will allow you to accelerate your death benefit to pay for potential long-term care expenses.
The company’s primary option for long-term care coverage is CareMatters.
Nationwide CareMatters is long-term care coverage linked to a fixed-premium universal life insurance policy.
If you qualify for long-term care benefits, the policy will provide a monthly benefit for as long as you require long-term care, up to the maximum benefit period you select.
There will still be a death benefit available to your beneficiaries. The amount will depend on how much of the policy you use for long-term care.
One of the benefits of this policy is that your life insurance beneficiaries are guaranteed a minimum of 20 percent of the long-term care benefit. This means if you use the entire amount of the policy for long-term care, your beneficiary will still receive a 20 percent minimum death benefit.
If you never need long-term care, the policy pays the full contracted death benefit.
Plus, as a universal life insurance policy, it also includes a cash surrender value that you can access via policy loans. Outstanding loans reduce the maximum monthly benefit, along with the total pool of LTC benefits and any associated inflation protection benefits, as well as the death benefit.
General policy features
You can apply for a minimum amount of $60,000 in coverage up to a maximum of $500,000.
CareMatters provides several payment options. You can make a one-time upfront premium payment. You can also pay monthly or annually for five or 10 years. A third option is to pay annually or monthly up to the insured reaching age 65 or age 100.
The policy enables you to choose a benefit period between two years and seven years.
CareMatters also includes four options for determining benefit increase amounts. It offers a 3 percent simple, 3 percent compound, and 5 percent compound rate.
CareMatters also offers a U.S. Medical Care Inflation option that is linked to the medical component of the Consumer Price Index (CPI) as tracked by the U.S. Bureau of Labor Statistics and the U.S. Department of Labor.
The target market is from ages 40 to 65, but it can be issued to applicants from ages 30 to 75.
Because it’s tied to a life insurance policy, you will have to go through full medical underwriting when you apply. You will need to work with a licensed life insurance agent at Nationwide.
There is an automatically included Accelerated Death Benefit Rider. It provides an accelerated death benefit paid to the policyholder when the insured has a life expectancy of 12 months or less. Benefits paid under this rider will result in a reduction of your benefit amounts available for both LTC benefits and death benefits and will reduce your cash surrender value.
CareMatters includes access to the Nationwide Care Guide Network. This is a free service that provides information and references for long-term care service providers and community services in your area.
The policy includes a guaranteed refund of premium upon surrender.
Separate premiums for long-term care & life insurance
In developing this product, Nationwide has also made it possible to use Health Savings Account (HSA) funds for part of the policy premium.
HSA funds can be used to pay premiums on long-term care insurance policies. However, they cannot be used on life insurance policies. This means you generally cannot use them on hybrid life and long-term care policies.
CareMatters solves that problem by making the long-term care benefits a rider with a separate premium cost from the base life insurance policy. Therefore, you should be able to use HSA for the part of your premium dedicated to the long-term care insurance benefit.
CareMatters II includes the following long-term care riders that have separate premium amounts from the life insurance portion of the policy:
- Long-term Care Acceleration Rider. This is part of the policy. It accelerates the policy amount when needed for long-term care benefits and is paid out in monthly benefits.
- Long-term Care Extension of Care Rider. Benefits under this rider begin once the total amount of benefits available under the LTC Rider have been exhausted. It is also part of any policy with benefit periods of 3 years or more.
How CareMatters works
Nationwide provided one hypothetical example of a 42-year-old man purchasing CareMatters II. He paid $275 a month in premium to age 100. He chooses coverage that will provide long-term care benefits for up to six years. His policy also includes an inflation rider that will increase his benefit amount by 3 percent compounded annually. Once he qualifies, his policy provides him with a long-term care monthly benefit starting at just over $4,000 a month. His total coverage is $311,407.
At age 80, this individual requires long-term care. By then his monthly benefit has grown to over $12,000. He has total coverage of $957,510.
On the other hand, if he never uses the long-term care benefits, his beneficiaries would collect a $96,000 death benefit. If he used all of his long-term care benefit, the life insurance portion would still provide a $19,000 death benefit.
In another Nationwide example, a 55-year-old woman makes a single $100,000 premium payment toward a CareMatters II policy. She gets a six-year benefit period. The total long-term care benefit equals $476,640.
The first $158,880 represents an acceleration of the specified amount, which means that as monthly LTC benefits are paid, the specified amount and death benefit are reduced.
After the specified amount has been completely accelerated for long-term care, the Extension of Benefits Rider provides an additional $317,760 for long-term care.
Even if all of the LTC benefits are collected, a guaranteed minimum death benefit of $31,776 is paid to the beneficiaries.
CareMatters I & II
In 2019, Nationwide launched version II of CareMatters. However, the second version is not available in all states. Where that is the case, customers can still get the version I of the product. The main differences between the two versions include:
- Version II offers two additional premium payment options: paying annually or monthly to age 65; or paying annually or monthly to age 100.
- Version II retroactively pays LTC benefits that were not payable during the 90-day elimination period. Once the elimination period is satisfied, benefits for the first 90 days will be paid along with benefits for the fourth month.
Filing a claim
You can file a claim for long-term care benefits by contacting your Nationwide agent or the claims department at the company. Once you’ve made contact, the company will verify your coverage. Then, a claims coordinator will contact the insured or their legal representative and help with the process.
Money.com recently named Nationwide the best long-term care insurer for Customer Satisfaction.
The insured must be certified by a U.S.-licensed healthcare practitioner to:
- Be unable to perform, without substantial stand-by or hands-on assistance from another individual, at least 2 activities of daily living (ADLs) due to a loss of functional capacity for a period of at least 90 days (ADLs are bathing, continence, dressing, eating, toileting and transferring); or
- Have a severe cognitive impairment that requires them to receive substantial supervision from another individual to protect them from threats to health and safety due to their impairment.
The insured must also complete a 90-calendar-day elimination period. Upon meeting the elimination period, it is satisfied for the life of the policy in the event you have more than one LTC claim.
The LTC claim must be recertified at least every 12 months, but maybe sooner based on the insured’s recoverability or condition.
About Nationwide
Nationwide is a Fortune 100 company and one of the largest diversified insurance and financial services companies in the United States. The company was founded in 1926 as Farm Bureau Mutual Automobile Insurance Company. It changed its name to Nationwide in 1955 to reflect a strategy to sell products across the country.
Columbus, Ohio-based Nationwide provides a full range of insurance and financial services products including auto, business, homeowners, farm, and life insurance; public and private sector retirement plans, annuities and mutual funds; excess & surplus, specialty and surety; pet, motorcycle, and boat insurance.
Nationwide’s current CEO is Kirt Walker, who has served in that role since 2019. He joined Nationwide in 1986 and prior to becoming CEO, he led Nationwide Financial for 10 years.
A.M. Best has given Nationwide a rating of A+, its second-highest rating. Nationwide also carries the fifth highest ratings from Moody’s (A1) and Standard & Poor’s (A+).
The information and content provided herein is for educational purposes only, and should not be considered legal, tax, investment, or financial advice, recommendation, or endorsement. Breeze does not guarantee the accuracy, completeness, reliability or usefulness of any testimonials, opinions, advice, product or service offers, or other information provided here by third parties. Individuals are encouraged to seek advice from their own tax or legal counsel.
