If you’re interested in an Hybrid Asset Based Long Term Care Policy, For Fall-Winter 2020 we currently recommend NationWide CareMatters II or Securian SecureCare. Both are Cash Indemnity Plans, which pay you a monthly cash stipend that you can spend as you see fit. You can use this money on Care, building a ramp into your home, paying a relative or friend to take care of you, or even save it for a later date.
For a Joint (Spouse) Policy, One America Asset Care has a great product. Particularly if one person is in better health than their partner. In Addition, you can also use qualified funds (IRA, Pension, etc.) to fund this policy. One America Asset Care is the only product on the market to offer Unlimited LTC care option.
(Disclaimer: Our services to you are free, we are compensated by the carrier for our services)
If you have any questions or would like to see a personalized proposal feel free to call or email Cliff Marshall Here.
NationWide CareMatters II
What separates Nationwide CareMatters II from other asset based long term care policies?
Nationwide CareMatters II offers a “Cash Indemnity” plan which means it will pay you directly the monthly benefit of your plan that you cash to use for long term care as you see that works best for you. This includes home health care, assisted living facilities, nursing home care and even for a relative or friend to provide assistance.
A majority of long term care policies are what are called “reimbursement policies.” This means when you are billed for long term care expenses, you send your monthly bills to the insurance company to be reimbursed.
What else does Nationwide CareMatters II offer?
- Liquidity: The policy is a liquid asset and can be surrendered for cash in the form of the cash surrender value. The amount you would receive is based on the time you surrender the plan and each person would have a different amount based on the policy they have.
- Death Benefit: If you never use the coverage or even if you did use the coverage, as long as it is not more than the base death benefit then your beneficiaries would receive a death benefit.
How does NationWide CareMatters II Policy Work?
Let’s view an example:
- A 60 year old male with a couples discount
- Wants to get the maximum amount of LTC benefits
- Premium is $6,750 a year for 10 years
As we can see, $565 per month for 10 years equates to an immediate monthly benefit of $3,404 per month for four years. By the time you reach age 80, the policy has grown to $5,446 per month in long term care benefits
Nationwide CareMatters II
If you’re fortunate enough to never use the long term care coverage, you have the option of surrendering the policy for the amounts on the bottom column. If you were to pass away without using the coverage, your beneficiary would receive $81,697 in tax free death benefit.
What are Some General Details about Nationwide CareMatters II?
Issue Age: One of the advantages of the new Nationwide CareMatters II plan is that they have lowered the issue ages to age 30. You may be wondering why would someone in their 30’s be interested in a Long Term Care Policy. If you have been reading our other posts, a common concern we talk about is the rising cost of long term care. The earlier a person prepares for the future the lower the premium will be, thus allowing young professionals to more easily plan and prepare for the future and like most insurance plans, the younger you start the lower the cost.
Guaranteed Premiums: Nationwide CareMatters II offers guaranteed premiums. Some of the biggest complaints about traditional long term care policies have always been price increases over time. This causes many clients to lower their benefit in order to offset the price increase.
Clients would pay on their policies for years, only to have the company raise their premium above their ability to pay. They would then have to reduce the benefit amount to be able to afford. When the time came that they needed it the benefit had been decreasing over time while the cost of care had been increasing.
If at some point they could no longer pay the premium they would have to let the coverage lapse without receiving their benefits or money in return.
Nationwide CareMatters II is not like this — the premiums are guaranteed up front and not subject to change.
Guaranteed Long Term Care Benefits: Nationwide CareMatters II has guaranteed benefits for the amounts you choose and for the benefit period you choose. For example, if you start off with a $200 per day benefit, with a 5 year benefit period and a 3% compound inflation protection, you will know exactly how much in benefit you would receive if you were to need coverage at any point later on.
Cash Indemnity: As we touched upon in the first paragraph. Once you qualify for long term care and satisfy a 90 day elimination period, you are granted the full monthly benefits paid in cash. There is no need to submit bills or receipts once the claim is approved. Also, with the CareMatters II plan, after you satisfy the 90 day elimination period, Nationwide will reimburse you the 90 days you paid out of pocket.
The monthly benefit is yours to spend as you see fit. You can elect to receive 100% of your available benefit and any unused benefit can be saved for future use. As we mentioned earlier, many people prefer to receive care in the comfort of their own homes. This feature allows you freedom on how you receive coverage and who provides you that coverage, even allowing you to pay family members to assist you
If you were to have a reimbursement plan, you would have to submit bills and receipts every month. Some of the services you submit for reimbursement might not be covered which means you’d be stuck paying an out-of-pocket expense.
Nationwide CareMatters II Inflation Riders: With the new product we now have several different options we can use to protect against the rising cost of care.
The 3% Simple option increases the base benefit by 3% of the original face amount each year. If you start with a $6,000 monthly benefit amount, the monthly benefit increases by $180 per month.
With the 3% Compound option, the increase each year adds to the previous year’s base benefit. This means that the benefit amount is more every year after the first year as compared to the 3% Simple. As an example, assuming we start with the $6,000 monthly benefit, with the 3% Simple plan the monthly benefit has climbed to $9,420.00 in year 20. With the 3% Compounding plan, the monthly benefit has climbed to $10,521.00. We are looking at an increase of $1,100 in monthly benefits.
The 5% Compounding method is the same as the 3% Compounding method but with an added 2% benefit.
The new option offered by Nationwide is the US Medical Care Inflation Option. Under this option, the maximum monthly benefit is guaranteed to increase at least 2%, and up to 6% per year. While not on claim, the benefit is adjusted every 3 years. Once you go on claim the benefit is adjusted every year.
Each one of these different options have different pricing.
Flexible Payment Schedules: Like most carriers Nationwide offers many different payment options on the CareMatters II policy. You have the option to make a one time single payment, which would be the only payment ever required for the duration of the policy. You can also make annual or monthly payments for a five year period and a 10 year period. Then there is also a monthly or annual payment plan to age 65 for clients with an issue age of 30 to 54. And for those who want the lowest payment available while maintaining the premium guarantees, you may also use a payment plan to age 100 for those with an issue age of 30 to 65.
Different Return Of Premium (ROP) Options: Nationwide CareMatters II provides three return of premium options to provide liquidity when needed.
- 100% Vested Return of Premium
- One Time Step Up
- Maximum LTC Benefit
Nationwide CareMatters II Guide Network: Nationwide CareMatters II policies provide a guide network resource tailored to your specific geographic area. This gives the policy owner access to a wide range of referral options such as home care and housing options, assisted living or nursing homes, adult day care, memory and Alzheimer’s care, End-Of-Life care, meal and nutrition services, safety and adaptive equipment, and transportation.
Comparing Long Term Care Policies: Cash Indemnity
Single Premium: $100,000
Compound Inflation: 3%
LTC Benefit Period: 6 Years
Age 60 Age 80 Return Premium (65)
Nationwide Care Matters II- Vested $4,112 $8,699 $100,000
Nationwide Care Matters II- LTC Maximum $4,817 $8,699 $51,427
Securian SecureCare $6,587 $6,587 $100,000
Nationwide Care Matters II- Vested Total Benefits Year 80: $576,405
Nationwide Care Matters II- LTC Maximum Benefits Age 80: $675,253
Securian SecureCare-Maximum LTC Benefits Age 80: $683,524
How does the Nationwide Care Matters II Premium Breakdown?
The Premium Payment Period for this proposal is a “single pay.” As long as the premium obligation is met and no loans or partial surrenders are taken, the quoted benefits are guaranteed. For any scheduled premium after the first, there will be a 61 day grace period. Once the grace period has ended, we mail the grace period notice which allows you to make the premium payment. The Scheduled Premium breaks down as follows:
- Life Insurance Premium – $49,067.18
- LTC Rider Premium- $4,775.95
- LTC Extension of Benefits Premium – $11,428.48
- LTC Inflation Protection Rider Premium – $34,728.39
How does Nationwide Care Matters II Premium surrender work?
The Refund of Premium on Surrender ensures that if the total premium paid multiplied by the Premium Refund Percentage (less any partial withdrawals) exceeds the policy Cash Surrender Value, then the excess will be refunded upon surrender. If you chose the Vested Refund of Premium on Surrender Option, the Premium Refund Percentages are as follows:
Premium Refund Percentage Year 1 = 85% Year 2 = 88% Year 3 = 91% Year 4 = 94% Year 5 = 97% Years 6 + = 100%.
Total Long-Term Care (LTC) Benefits – $296,031 is the total maximum amount of LTC benefits available to you from your Nationwide CareMatters II policy. This amount does not include the Inflation Protection Option you may have elected.
Currently (September 2020) the Nationwide CareMatters II has more flexibility with paying for the policy. We can do a “dump in” into the policy to help lower the payments. Recently we had a client that was looking at a policy with a $14,000 per year payment for 10 years and not knowing what the future held for his income, he wrote a check for $50,000 and the payments almost cut in half to do the same thing.
It is also a great option for younger people (less than 50-55). Many of the people in this age range have had a parent need assistance and after seeing the costs involved, we are now seeing many of these people starting at a much earlier age on planning for this particular need.
If you would like to talk more about Nationwide CareMatters II or get a personalized quote Contact Us Here.
If you would like to learn more about other long term care options, here are some of my other product reviews: Securian SecureCare, Lincoln MoneyGuard III, Nationwide CareMatters II, Brighthouse SmartCare, MassMutual CareChoice One, One America Asset Care, Mutual of Omaha, American General Quality of Life.
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