Is Nationwide Long-Term Care Insurance Worth It? (w/Examples) + FAQs

Nationwide long-term care insurance is worth it for individuals ages 30-75 who have sufficient assets to protect, can afford the premiums without financial strain, and want guaranteed cash indemnity benefits with a death benefit. The value depends on your age, health status, financial situation, and need for flexibility in choosing caregivers.

The core problem facing Americans stems from the Health Insurance Portability and Accountability Act of 1996 (HIPAA), which created strict federal requirements for tax-qualified long-term care insurance policies. Under Internal Revenue Code Section 7702B, insurers must meet specific benefit triggers—requiring policyholders to be unable to perform at least two out of six Activities of Daily Living (ADLs) for a minimum of 90 days, or demonstrate severe cognitive impairment. This federal threshold creates the immediate negative consequence that many people who need care cannot access their benefits until they reach this level of disability, leaving families to pay thousands of dollars out-of-pocket during the waiting period.

Seven out of ten Americans turning 65 today will require some form of long-term care services in their lifetime. The national median cost for a semi-private nursing home room reached $111,325 annually in 2024, representing a 7% increase from the previous year. Home care costs $33 per hour nationally, with families paying $5,000 to $6,500 monthly for 44 hours of weekly care.

What You Will Learn

💰 How Nationwide’s pricing compares to competitors and when the higher premiums deliver actual value through cash indemnity benefits and death benefit guarantees

🏥 The exact benefit triggers required under HIPAA and how to document your claim properly to avoid the 25% initial denial rate that plagues the industry

📋 Three real-world scenarios showing when Nationwide pays out versus when claims get denied, including specific dollar amounts and timeframes

⚖️ The critical mistakes that cause 60% of families to overpay for coverage they never use or underbuy coverage that runs out too soon

🔍 State partnership programs and federal tax deductions that can save you $1,000 to $5,000 annually on premiums while protecting assets from Medicaid recovery

Understanding Nationwide’s Long-Term Care Insurance Products

Nationwide offers four distinct long-term care solutions rather than traditional stand-alone policies. Each product combines life insurance or annuity features with long-term care coverage, creating what the industry calls “hybrid” or “linked-benefit” policies.

The insurance company structures these products to eliminate the “use-it-or-lose-it” problem that plagued traditional long-term care insurance. If you never need care, your beneficiaries receive a death benefit. If you need extensive care, the policy pays monthly benefits.

Nationwide CareMatters II

CareMatters II represents the flagship individual product. The policy provides life insurance with long-term care acceleration benefits. When you purchase this policy, you receive a death benefit that accelerates to pay for long-term care expenses when needed.

The product offers coverage for individuals ages 30-75. Younger buyers pay significantly less. A 45-year-old can purchase substantial coverage for 30-50% less than a 65-year-old buying identical benefits.

Nationwide designed CareMatters II as a cash indemnity policy. Once you meet the benefit triggers, the company sends you 100% of your monthly benefit in cash—no receipts required, no documentation needed. This feature separates Nationwide from most competitors who require reimbursement of actual expenses.

The death benefit comes with a guaranteed minimum of 20% of the long-term care specified amount. This guarantee exceeds industry standards, where most carriers provide 10% minimums for couples or no minimum guarantee.

Nationwide CareMatters Together

CareMatters Together serves married couples and domestic partners. The product creates a shared pool of benefits that either person can access in any combination.

For example, if you purchase an 8-year shared benefit period, one spouse could use 2 years while the other uses 6 years, or one could use the full 8 years while the other uses none. This flexibility increases the probability that you will use your full benefit pool.

The joint-life structure reduces costs compared to purchasing two separate individual policies. A 55-year-old couple pays approximately $165,313 for an 8-year shared benefit with $6,000 monthly benefits and 3% compound inflation protection. Two separate 6-year individual policies would cost roughly $240,000 for comparable coverage.

California and New York do not allow the sale of CareMatters Together due to state insurance regulations.

Nationwide CareMatters Annuity

CareMatters Annuity targets individuals who prefer annuity-based funding rather than life insurance. The product accepts a single premium payment, conversion of an existing non-qualified annuity, or life insurance policy into long-term care coverage.

The annuity multiplies your initial investment by two or three times for long-term care benefits. A $100,000 premium creates $200,000 or $300,000 in long-term care coverage on day one. The contract value then grows at a guaranteed 3% fixed crediting rate annually.

This product works well for individuals with appreciated annuities who want to reposition those assets. The Pension Protection Act of 2006 allows tax-free 1035 exchanges from annuities or life insurance into qualified long-term care insurance without triggering immediate taxation.

The annuity option requires simplified underwriting with minimal health questions and a cognitive screening for applicants age 70 and older.

Long-Term Care Rider on Universal Life Policies

Nationwide offers a Long-Term Care Rider II that attaches to specific universal life insurance policies. The rider accelerates the death benefit to pay for long-term care expenses when needed.

The rider can provide a long-term care specified amount ranging from 10% to 100% of the life insurance policy coverage amount. Monthly benefits calculate as the lesser of: the acceleration percentage of the specified amount, twice the HIPAA per diem limit times 30 days, or 1/12th of the maximum lifetime benefit remaining.

This option suits individuals whose primary need is death benefit protection with secondary long-term care coverage. The rider costs less than standalone products but provides more limited benefits.

Federal Law Governing Long-Term Care Insurance

The Health Insurance Portability and Accountability Act of 1996 (HIPAA) established the federal framework for tax-qualified long-term care insurance. Congress enacted Section 7702B of the Internal Revenue Code to clarify that qualified policies receive the same tax treatment as accident and health insurance.

Tax-Qualified versus Non-Tax-Qualified Policies

Tax-qualified policies must meet specific federal requirements. The policy must use at least five of six standardized Activities of Daily Living as benefit triggers: eating, toileting, transferring, bathing, dressing, and continence. The policyholder must be unable to perform at least two ADLs without substantial assistance for a minimum of 90 days, or demonstrate severe cognitive impairment requiring substantial supervision.

Benefits paid from tax-qualified policies are excluded from gross income under Section 105(b), similar to health insurance benefits. Premiums are treated as medical expenses under Section 213, allowing deductions for itemizers whose total medical expenses exceed 7.5% of adjusted gross income.

The IRS establishes age-based annual limits for deductible premiums. For 2024, individuals age 40 or less can deduct up to $470, those age 41-50 can deduct $880, age 51-60 can deduct $1,760, age 61-70 can deduct $4,710, and those over 70 can deduct $5,880.

Non-tax-qualified policies existed before HIPAA but no longer receive new sales. These older policies may have different benefit triggers and do not qualify for federal tax deductions on premiums. However, they may offer more liberal claim triggers.

The HIPAA Per Diem Limitation

The IRS sets an annual per diem limitation on tax-free benefits from cash indemnity policies. For 2024, the per diem limit was $420 per day, or $12,600 monthly. Benefits exceeding this amount may be taxable unless the policyholder demonstrates actual qualified long-term care expenses in excess of the per diem amount.

Nationwide’s cash indemnity structure means you must monitor whether your monthly benefits exceed the per diem limit. If your monthly benefit is $6,000 and the IRS limit is $12,600, you remain comfortably below the threshold. However, if your benefit grows through compound inflation to $15,000 monthly, you would need to document at least $15,000 in actual care expenses to receive the full amount tax-free.

Employer-Provided Coverage

Employers can deduct premiums paid for employee long-term care insurance as ordinary business expenses under Section 162. Employees exclude employer-paid premiums from income under Section 106.

However, HIPAA explicitly prohibits including long-term care insurance in cafeteria plans or flexible spending arrangements. Employees cannot elect to receive long-term care coverage in place of cash compensation.

C-corporations can deduct 100% of premiums paid for employees, owners, and their spouses without limit. S-corporations can deduct premiums for employees but face restrictions on deducting premiums for more-than-2% shareholders.

State Regulations and Partnership Programs

Most states operate Long-Term Care Partnership Programs that provide Medicaid asset protection for individuals who purchase qualified partnership policies.

How Partnership Programs Work

Partnership programs create a dollar-for-dollar asset disregard when applying for Medicaid long-term care benefits. If you purchase a partnership policy with $200,000 in benefits and exhaust those benefits, you can keep $200,000 in countable assets that would normally disqualify you from Medicaid.

For example, normal Medicaid rules in most states require individuals to spend down assets to $2,000 for single applicants. If you exhausted a $200,000 partnership policy, you could keep $202,000 in assets and still qualify for Medicaid.

The Deficit Reduction Act of 2005 allowed all states to create partnership programs. Currently, Alaska, Hawaii, Massachusetts, Mississippi, Utah, Vermont, and Washington D.C. do not have active programs.

Partnership policies must meet specific state requirements that often exceed federal HIPAA standards. Most states require partnership policies to include compound inflation protection for purchasers under age 61. Between ages 61-76, purchasers must include some form of inflation protection. After age 76, inflation protection remains optional.

State-Specific Rules Create Variation

Louisiana requires partnership policies to cover both institutional and home services comprehensively. The Louisiana Department of Insurance maintains a list of approved companies selling partnership policies.

California has high state-specific requirements. The state’s partnership program, one of the original four established in 1992, includes unique inflation protection mandates and consumer protections.

New York implemented a 30-month look-back period for home care Medicaid benefits effective in 2026, creating increased urgency for advance planning. The state’s Medicaid asset limits differ from federal standards, with single applicants allowed $32,396 in countable assets compared to the typical $2,000 federal guideline.

Reciprocity Between States

The Deficit Reduction Act requires the Secretary of Health and Human Services to develop standards for reciprocal recognition of partnership policies among states. Both states must have partnership programs, the states must have a reciprocal agreement, and the policyholder must meet Medicaid eligibility criteria in the new state.

Reciprocity agreements vary. Some states recognize all partnership policies from other states. Others recognize policies only from specific states with similar programs. You must verify reciprocity before moving to a new state if asset protection matters to your planning.

Understanding Activities of Daily Living Triggers

The six Activities of Daily Living serve as the primary benefit triggers for tax-qualified long-term care insurance under HIPAA.

Bathing

Bathing means the ability to clean oneself, get in and out of a shower or bath, and perform personal hygiene activities like shaving or brushing teeth without substantial assistance from another person. Substantial assistance means hands-on physical help, not just supervision or cueing.

Insurance companies assess whether you can safely and effectively bathe yourself. If you can wash most of your body but need help getting in or out of the tub due to balance issues, you meet the inability standard for bathing.

Dressing

Dressing includes putting on and taking off all items of clothing, including braces, fasteners, or artificial limbs. The assessment covers your ability to select appropriate clothing, manipulate buttons and zippers, and dress yourself for weather conditions.

Cognitive impairment can affect dressing even when physical ability exists. If dementia causes you to put on multiple layers of clothing in summer or forget to dress at all, you meet the inability standard.

Toileting

Toileting encompasses getting on and off the toilet, maintaining proper hygiene after using the toilet, and managing ostomy bags or catheters if present. Substantial assistance means another person must physically help you with these tasks.

Incontinence alone does not necessarily mean you cannot perform toileting. The assessment focuses on whether you can physically get to the toilet, transfer on and off, and clean yourself afterward.

Transferring

Transferring means moving onto and out of a bed, chair, or wheelchair without substantial assistance. The ability to reposition yourself in bed or shift weight in a chair falls under this category.

Physical therapists often assess transferring ability using standardized tests. If you require a two-person assist to move from bed to wheelchair, you clearly cannot transfer independently.

Eating

Eating covers feeding oneself by getting food into the body from a receptacle, plate, cup, or table. This includes using utensils, cutting food, and bringing food to your mouth. It also includes receiving nutrition through a feeding tube or intravenously.

You can meet the inability standard even if you can physically chew and swallow. If tremors prevent you from controlling a fork, cognitive impairment causes you to forget how to use utensils, or you require someone to feed you, you cannot perform eating independently.

Continence

Continence means the ability to control bladder and bowel functions or manage incontinence effectively. This includes changing incontinence products, managing catheters, or performing intermittent catheterization.

Complete incontinence clearly meets the inability standard. Partial incontinence may qualify if you cannot manage the condition independently. Someone who can physically change incontinence products but forgets to do so due to dementia meets the inability standard.

Cognitive Impairment as an Alternative Trigger

Tax-qualified policies must also pay benefits when severe cognitive impairment creates a threat to health and safety, even if you can perform all ADLs physically. Conditions like Alzheimer’s disease, vascular dementia, and traumatic brain injury fall under this trigger.

The licensed health care practitioner must certify that you require substantial supervision to protect yourself or others from threats to health and safety. Examples include wandering away from home, leaving the stove on, or failing to take critical medications.

Cognitive testing through instruments like the Mini-Mental State Examination or Montreal Cognitive Assessment provides objective evidence. Insurance companies typically require test scores below specific thresholds combined with physician documentation of safety risks.

The Elimination Period Explained

The elimination period functions as a deductible measured in time rather than dollars. You must satisfy the elimination period before the insurance company begins paying benefits.

Calendar Day Method

Nationwide CareMatters II uses a calendar day method with a unique twist. You must satisfy 90 calendar days of qualifying for benefits. However, Nationwide refunds the elimination period retroactively once you meet it.

Here is how it works: On day 1, you become certified as chronically ill by meeting two-ADL triggers. You begin receiving care. You pay for care out-of-pocket during days 1-90. On day 91, Nationwide begins paying your monthly benefit. Additionally, Nationwide refunds you for the care received during days 1-90, up to your maximum monthly benefit amount.

This retroactive refund feature distinguishes Nationwide from most competitors. The effective elimination period becomes zero days, though you must have resources to fund care during the initial 90 days.

Service Day Method

Traditional service day elimination periods count only days when you receive professional care services covered by the policy. If you receive care 2 days per week, you need 45 weeks to satisfy a 90-day service elimination period.

Family caregiver days generally do not count toward service day elimination periods. You must receive care from licensed professionals or agencies during the elimination period.

Some policies use “service days with credit” that provide a full week’s credit for receiving care on any day during that week. This accelerates satisfaction of the elimination period.

One-Time versus Per-Episode

Most policies, including Nationwide’s products, require you to satisfy the elimination period only once during the policy lifetime. Once satisfied, any future claims begin paying benefits immediately without a new elimination period.

Some older policies required elimination periods for each separate episode of care. If you needed care for a stroke, recovered, then later needed care for a hip fracture, you would satisfy two elimination periods. This per-episode structure is rare in current policies.

Inflation Protection Options

Inflation protection increases your benefits annually to help maintain purchasing power as care costs rise.

3% Compound Inflation

Nationwide offers 3% compound inflation as its primary option. Your benefits increase by 3% of the previous year’s benefit amount each year. A $6,000 monthly benefit becomes $6,180 in year 2, $6,365 in year 3, and $12,714 at age 80 for a 55-year-old purchaser.

Compound inflation creates exponential growth. The benefit compounds on itself, similar to compound interest in savings accounts. Over 20-30 years, compound inflation produces dramatically higher benefits than simple inflation.

The 3% compound option costs significantly less than 5% compound inflation while still providing meaningful protection. Most purchasers select 3% compound as the optimal balance between cost and benefit growth.

5% Compound Inflation

Five percent compound inflation was historically the industry standard recommendation for purchasers under age 65. Benefits grow more rapidly, with a $6,000 monthly benefit reaching $20,592 at age 80 for a 55-year-old purchaser.

However, insurance companies increased pricing for 5% compound inflation dramatically in recent years. The premium difference between 3% and 5% compound can be 40-60%, making 5% compound unaffordable for many purchasers.

Simple Inflation

Simple inflation increases benefits by the same dollar amount each year based on the original benefit. A $6,000 monthly benefit with 5% simple inflation increases by $300 annually, reaching $13,500 per month at age 80 for a 55-year-old purchaser.

Simple inflation works better for purchasers age 75 and older who expect to need care within 10-15 years. The lower cost makes coverage more affordable, and the shorter time horizon reduces the compounding advantage of compound inflation.

Partnership program policies generally cannot use simple inflation for purchasers under age 61.

CPI-Based Inflation

Consumer Price Index inflation adjusts benefits based on actual CPI increases, typically with a floor of 0% and cap of 6%. The CPI averaged approximately 2.4% from 1983-2024.

The problem is that healthcare costs and long-term care costs increase faster than general inflation. CPI protection may leave you significantly underinsured 20-30 years later.

Nationwide Pricing Examples

Understanding actual costs helps determine whether Nationwide fits your budget and delivers value.

Age 45 Couple Pricing

A 45-year-old couple purchasing CareMatters Together with $6,000 monthly benefits, an 8-year shared benefit period, 3% compound lifetime inflation, and $216,000 guaranteed life insurance pays a single premium of $130,791.

The same couple purchasing two separate CareMatters II individual policies with 6-year benefit periods each pays approximately $154,287 total. The joint policy saves roughly $23,500 while providing more flexibility in benefit utilization.

At age 45, the initial $6,000 monthly benefit grows to $10,837 per month by age 65, with total shared benefits of $1,156,359.

Age 55 Couple Pricing

A 55-year-old couple purchasing the same CareMatters Together policy—$6,000 monthly benefits, 8-year shared benefit, 3% compound inflation—pays a single premium of $165,313.

The couple could pay over 5 years at $34,750 annually ($173,750 total) or 10 years at $18,590 annually ($185,900 total). The longer payment period increases total premium but improves cash flow.

At age 55, the $6,000 initial monthly benefit grows to $8,053 at age 65, $10,837 at age 75, and $14,564 at age 85. Total shared benefits reach $1,554,050 by age 85.

For individual policies, a 55-year-old woman with CareMatters II paying $100,000 single premium with a 4-year benefit period receives approximately $591,572 total LTC benefits and $8,216 monthly benefit at issue.

Age 65 Couple Pricing

A 65-year-old couple purchasing CareMatters Together with the same benefits pays a single premium of $220,025 for the 8-year shared benefit.

The significant premium increase from age 55 ($165,313) to age 65 ($220,025) demonstrates the cost advantage of purchasing earlier. The 10-year delay costs an additional $54,712, or 33% more.

A 65-year-old woman purchasing CareMatters II with $100,000 single premium receives approximately $450,000-$500,000 in total LTC benefits, depending on underwriting class and inflation options.

Monthly Premium Comparison

Nationwide’s monthly premiums for CareMatters products range from $300 to upward of $600 for typical coverage amounts. A Reddit user shared a CareMatters policy quote with $411.96 monthly premium, providing $99,463 day 1 LTC benefits growing to $735,232 by age 85, with $1,500 monthly benefit growing to $11,088 by age 85.

These premiums are guaranteed never to increase, unlike traditional long-term care insurance where 40-60% premium increases have occurred on older policies.

When Nationwide Pays Benefits: Three Scenarios

Situation	Result
Scenario 1: Martha, Age 78, Alzheimer’s Diagnosis	Martha purchased CareMatters II at age 55 with $6,000 monthly benefit, 3% compound inflation, 6-year benefit period. She paid $100,000 single premium. At age 78, she receives an Alzheimer’s diagnosis. Her neurologist certifies she requires substantial supervision due to wandering and inability to take medications safely. Her cognitive test scores fall below the threshold. Nationwide approves her claim based on cognitive impairment alone, without assessing ADLs.
Monthly Benefit at Age 78	$12,180 (grown from $6,000 through 3% compound inflation)
Total Benefit Pool at Age 78	$877,920 (6 years × 12 months × $12,180)
Payment Structure	Nationwide sends $12,180 cash each month after 90-day elimination period. After 90 days, Nationwide refunds the first 90 days retroactively. No receipts required. Martha uses funds to pay for home health aide, medications, and compensates her daughter for caregiving.
Scenario 2: Robert, Age 72, Stroke	Robert purchased CareMatters II at age 60 with $8,000 monthly benefit, 3% compound inflation, 4-year benefit period. He paid $140,000 in premiums over 10 years. At age 72, he suffers a stroke leaving him unable to transfer or dress independently. His physician certifies inability to perform two ADLs (transferring, dressing) expected to last at least 90 days.
Monthly Benefit at Age 72	$10,736 (grown from $8,000 through 3% compound inflation)
Claim Process	Robert’s wife files claim with physician certification, ADL assessment, and plan of care. Nationwide approves within 45 days. Robert receives $10,736 monthly for 3 months while paying out-of-pocket for assisted living ($6,000/month) and physical therapy ($1,500/month). On day 91, Nationwide sends full monthly benefit plus retroactive payment for days 1-90.
Total Paid Over 4 Years	$515,328 ($10,736 × 48 months)
Remaining Death Benefit	$28,000 guaranteed minimum paid to beneficiaries upon Robert’s death after benefits exhaust.
Scenario 3: Linda, Age 84, Progressive Disability	Linda purchased CareMatters Together with her husband at age 60. They paid $175,000 for 8-year shared benefit, $6,000 initial monthly benefit, 3% compound inflation. Her husband died at age 78 without needing care. Death benefit of $200,000 paid to Linda. At age 84, Linda experiences progressive decline from arthritis and heart failure. She cannot bathe, dress, or toilet independently.
Monthly Benefit at Age 84	$14,326 (grown from $6,000 through 3% compound inflation)
Available Benefits	Full 8-year shared pool ($1,375,296 total) because husband never used benefits
Care Costs	Linda chooses to remain home with 24-hour care costing $18,000/month. Nationwide pays $14,326 monthly. Linda pays difference of $3,674 from savings. After 4.5 years, Linda transitions to memory care ($8,000/month). Nationwide continues paying $14,326 monthly until benefits exhaust.

Common Mistakes to Avoid

Mistake 1: Buying Coverage Too Young or Too Old

Purchasing long-term care insurance in your 30s or early 40s means paying premiums for 30-40 years before likely needing care. The time value of money works against you. Investing those premium dollars instead may generate more wealth to self-fund care.

However, waiting until your late 60s or 70s creates different problems. Premiums cost 150-200% more than purchasing at age 55. Health conditions may make you uninsurable or require rated premiums. The probability of needing care soon reduces the insurance benefit period.

The optimal purchase age falls between 50-65 for most individuals. You are young enough for affordable premiums and good health, but old enough that the purchase timeframe aligns with realistic care needs.

Mistake 2: Purchasing Insufficient Inflation Protection

Many buyers select 3% simple inflation or no inflation protection to lower premiums. This creates a policy that becomes inadequate within 15-20 years.

If care costs increase 5% annually and your benefits increase 3% annually, you lose 2% of purchasing power each year. After 20 years, your benefit covers only 67% of actual costs.

Partnership program requirements mandate compound inflation for purchasers under age 61 precisely because simple inflation or no inflation renders policies ineffective.

Mistake 3: Buying Facility-Only Coverage

Some policies or riders cover only nursing home or assisted living facility care, excluding home care. However, most people prefer receiving care at home. Excluding home care eliminates your most desired benefit and may force you into institutional settings earlier than necessary.

Nationwide’s products cover care in all settings: home, assisted living, adult day care, and nursing homes. This comprehensive approach costs more but provides essential flexibility.

Mistake 4: Selecting Inappropriate Benefit Periods

The average long-term care claim lasts 3.7 years. Many purchasers buy 2-year benefit periods to reduce premiums, creating a 46% probability of exhausting benefits.

Conversely, purchasing unlimited lifetime benefits costs 40-60% more than 6-year benefits for coverage you may never use.

A 4-6 year benefit period strikes the balance. You cover the average claim plus margin, without overpaying for low-probability extended care needs.

Mistake 5: Failing to Verify Partnership Certification

If asset protection matters to your planning, you must purchase a partnership-certified policy in your state of residence. Simply buying long-term care insurance does not automatically provide partnership benefits.

Insurance agents must specifically identify policies as partnership-certified. The Louisiana Department of Insurance, for example, maintains a list of approved partnership policies. If your policy is not on the list, it does not provide partnership protection regardless of what the agent said.

Mistake 6: Allowing Policies to Lapse

Approximately 25% of long-term care insurance policyholders age 65 and older allow policies to lapse before death, forfeiting all benefits and premiums paid. Lapses often occur due to cognitive impairment causing the policyholder to forget premium payments.

Most states require a 5-month grace period before lapse, and many policies include contingent nonforfeiture benefits. If lapse occurs due to cognitive impairment, physician documentation may allow reinstatement.

Pros and Cons of Nationwide Long-Term Care Insurance

Pros

100% Cash Indemnity Benefits distinguish Nationwide from competitors. Once benefits begin, Nationwide sends the full monthly benefit in cash without requiring receipts, bills, or documentation. You control how to spend the money—paying family caregivers, covering non-covered services, or addressing other needs.

Retroactive Elimination Period Refund provides a unique advantage. After satisfying the 90-day elimination period, Nationwide refunds those first 90 days up to your monthly benefit limit. This feature effectively creates a zero-day elimination period for purchasers who can front the initial costs.

20% Minimum Guaranteed Death Benefit exceeds industry standards. Even if you exhaust all long-term care benefits, beneficiaries receive at least 20% of the original LTC specified amount. Most competitors provide 10% minimums for couples or no minimum guarantee.

Guaranteed Level Premiums never increase throughout the policy life. Unlike traditional long-term care insurance with history of 40-80% premium increases, hybrid policies like CareMatters lock in premiums at purchase.

International Coverage includes care received anywhere in the world, not just the United States. This matters for families with international ties or retirees living abroad.

No Medical Exam Required for most applicants under age 70. Simplified underwriting uses health questions and telephone interviews rather than blood tests and medical examinations.

Flexible Payment Options allow single premium, 5-pay, 10-pay, 20-pay, or pay-to-age-65 or pay-to-age-100 structures. This flexibility helps align payments with your financial planning goals.

Cons

Higher Premiums than traditional stand-alone long-term care insurance and some hybrid competitors. Nationwide typically ranks 2nd or 3rd in cost comparisons. The premium difference can be $10,000-$30,000 over the life of the policy compared to lowest-cost options.

Significant Surrender Charges if you cancel early create illiquidity. CareMatters II has surrender charge schedules lasting 5-10 years, with charges of 80-96% in early years declining to zero by the end of the surrender period. If you need to access funds, you forfeit substantial amounts.

90-Day Elimination Period requires significant out-of-pocket spending before benefits begin. Even with retroactive refund, you must have $18,000-$40,000 available to fund care during those initial 90 days. Many families lack this liquidity.

Lower Death Benefit Return compared to standalone life insurance. If you never need long-term care, the death benefit paid to beneficiaries provides a 1-2% internal rate of return. You could potentially achieve higher returns investing premiums in diversified portfolios.

Limited Benefit Periods compared to traditional policies. Nationwide offers maximum 7-year individual benefit periods and 8-year shared benefit periods. Traditional policies sometimes offered unlimited lifetime benefits, though these products rarely exist today.

Restricted Availability in certain states. CareMatters Together cannot be sold in California or New York. The LTC rider is unavailable in Montana and U.S. territories.

Tax Treatment and Deductions

Premium Deductibility

Nationwide’s products are tax-qualified under Section 7702B, making premiums potentially deductible as medical expenses. You can deduct premiums up to the age-based IRS limits if you itemize deductions and your total medical expenses exceed 7.5% of adjusted gross income.

For example, a 62-year-old paying $6,000 annually for Nationwide CareMatters II can deduct $4,710 (the 2024 limit for age 61-70). If they have $8,000 in other medical expenses ($12,710 total) and adjusted gross income of $80,000, they exceed the 7.5% threshold ($6,000) by $6,710 and can deduct that amount.

Self-employed individuals can deduct premiums up to the age-based limits above the line under Section 162(l), without itemizing and without the 7.5% AGI floor.

C-corporations can deduct 100% of premiums paid for employees and owners as ordinary business expenses, potentially exceeding the age-based individual limits.

Benefit Taxation

Benefits paid from tax-qualified policies are generally excluded from income under Section 105(b). However, cash indemnity benefits face the HIPAA per diem limitation.

For 2024, the per diem limit was $420 daily or $12,600 monthly. If Nationwide pays benefits below this threshold, they are completely tax-free. If benefits exceed the threshold, amounts above the per diem are taxable unless you demonstrate actual qualified long-term care expenses equal to or greater than the benefits received.

Nationwide’s CareMatters products with 3% compound inflation may grow benefits above the per diem limit after 15-25 years. You must track actual care expenses to document tax-free treatment of amounts exceeding the per diem.

1035 Exchanges

The Pension Protection Act of 2006 allows tax-free 1035 exchanges from life insurance or annuities into qualified long-term care insurance. This permits repositioning of appreciated policies without immediate taxation.

For example, if you own a $150,000 annuity with $50,000 in gains, exchanging into Nationwide CareMatters Annuity avoids recognizing the $50,000 gain. When you later receive long-term care benefits, they are paid tax-free.

The exchange must occur directly between insurance companies without the policyholder taking constructive receipt of funds. Proper 1035 exchange forms must be completed.

How Nationwide Compares to Competitors

Feature	Nationwide CareMatters II	Lincoln MoneyGuard	Securian SecureCare	OneAmerica AssetCare
Cash Indemnity	100%	50%	100%	Reimbursement
Elimination Period	90 days with retroactive refund	0 days	90 days	30 days home / 60 days facility
Death Benefit Minimum	20%	10% (varies)	15%	10%
Return of Premium	Available with surrender charges	Available	Vested after specific period	Available
Pricing Rank	2nd-3rd highest	Middle range	Competitive	Middle range
Benefit Periods	2-7 years individual, 8 years shared	2-6 years	2-7 years	Up to lifetime

Lincoln MoneyGuard offers the advantage of zero elimination period, meaning benefits begin immediately without a waiting period. However, Lincoln pays only 50% of benefits as cash indemnity, requiring reimbursement for the other 50%.

Securian SecureCare provides 100% cash indemnity like Nationwide but typically costs 15-25% less for comparable coverage. The trade-off is lower guaranteed death benefit minimums and lack of the retroactive elimination period refund that Nationwide provides.

OneAmerica AssetCare offers lifetime benefit options that Nationwide does not. For purchasers concerned about very extended care needs, OneAmerica’s unlimited benefits provide superior protection. However, OneAmerica uses reimbursement rather than cash indemnity.

Who Should Buy Nationwide Long-Term Care Insurance

Ideal Candidates

High-asset individuals with $500,000-$5,000,000 in investable assets benefit most. You have sufficient wealth to justify protecting assets but not enough to comfortably self-fund 5-7 years of care at $100,000-$150,000 annually.

Age 50-65 purchasers receive optimal value. Premiums remain affordable while health typically allows standard underwriting. The purchase timeline aligns with realistic care needs in 15-30 years.

Couples wanting flexibility should consider CareMatters Together. The shared benefit pool provides more efficient use of benefits, with significantly higher probability that one spouse exhausts benefits compared to each purchasing separate policies.

Preference for home care aligns with Nationwide’s cash indemnity structure. You can pay family members, unlicensed caregivers, or informal support that reimbursement policies would not cover.

Desire for guaranteed costs makes hybrid policies attractive compared to traditional long-term care insurance with history of large premium increases.

Estate planning goals benefit from the guaranteed death benefit. You preserve at least 20% of the original specified amount for heirs even after exhausting long-term care benefits.

Poor Candidates

Limited liquid assets below $200,000 make Nationwide unaffordable. The minimum single premiums of $75,000-$100,000 consume too much of available assets, leaving insufficient funds for retirement needs.

Age under 45 or over 70 creates suboptimal timing. Under 45, you pay premiums for too many years before likely needing care. Over 70, premiums become prohibitively expensive and health issues may prevent approval.

Marginal income requiring premium financing through retirement account distributions or debt creates problems. If paying premiums strains your budget, you cannot afford the coverage.

Significant health conditions like history of stroke, advanced diabetes, cancer within 5 years, or severe arthritis will likely result in declined applications or heavily rated premiums. Nationwide may not be accessible.

Preference for Medicaid planning makes insurance unnecessary. If you plan to spend down assets and qualify for Medicaid intentionally, purchasing insurance works against that strategy.

Primary need for life insurance death benefit suggests purchasing term or permanent life insurance separately provides better value than hybrid products with lower death benefit returns.

Medicaid Interaction and Spend-Down Rules

Medicaid Asset Limits

Medicaid long-term care requires spending down assets to state-specific limits. Most states require single applicants to have $2,000 or less in countable assets. Notable exceptions include California ($130,000), New York ($32,396), and Illinois ($17,500).

Married couples have more complex rules. The community spouse resource allowance (CSRA) in 2026 ranges from $31,584 minimum to $157,920 maximum in most states. The healthy spouse can retain assets up to the CSRA while the institutionalized spouse qualifies for Medicaid.

The 60-Month Look-Back Period

Federal law requires a 60-month look-back period for asset transfers before Medicaid eligibility. Any transfer for less than fair market value within 60 months of applying for Medicaid creates a penalty period where Medicaid will not pay for care.

New York implemented a 30-month look-back for home care Medicaid effective in 2026. This creates urgency for advance planning, as transfers must occur more than 30-60 months before needing Medicaid.

Exempt Assets

Primary residence remains exempt up to $730,000 in home equity in most states. One vehicle, prepaid funeral arrangements, personal belongings, and household goods are also exempt.

Long-term care insurance purchased through partnership programs provides additional asset protection equal to benefits received. This allows preservation of significantly more wealth than Medicaid spend-down rules would otherwise permit.

Spend-Down Strategies

Paying down debts like mortgages, car loans, or credit cards reduces countable assets while improving financial position. These payments must be for legitimate existing debts, not new obligations created to qualify for Medicaid.

Home improvements that increase accessibility or value convert liquid assets into exempt home equity. Installing wheelchair ramps, widening doorways, or updating bathrooms are permissible spend-down methods.

Irrevocable funeral trusts remove funds from countable assets while pre-funding funeral arrangements. Most states exempt these trusts without dollar limits when established properly.

Medicaid Compliant Annuities convert lump sum assets into income streams, reducing countable assets. These annuities must be irrevocable, non-transferable, actuarially sound, and name the state Medicaid agency as remainder beneficiary.

Claim Denial Reasons and Prevention

Common Denial Reasons

Insufficient ADL documentation represents the most frequent denial cause. Insurance companies require clear evidence that you cannot perform at least two ADLs without substantial assistance. Vague physician statements like “patient needs help” do not meet the standard.

Your physician must specifically state which ADLs you cannot perform and why. Documentation should include phrases like “patient requires hands-on physical assistance to transfer from bed to wheelchair due to left-side paralysis from stroke”.

Missing cognitive impairment evidence causes denials when claims rely on cognitive triggers. Insurance companies require standardized cognitive testing results, not just a dementia diagnosis. Mini-Mental State Examination scores, Montreal Cognitive Assessment results, or neuropsychological testing provide necessary evidence.

Physician documentation must explain how cognitive impairment creates safety risks requiring substantial supervision. Examples include episodes of wandering, forgetting to eat, leaving the stove on, or inability to recognize safety hazards.

Unlicensed caregiver or facility leads to denials when policies require specific provider qualifications. Some policies mandate care from licensed home health agencies or certified nursing assistants. Family member caregivers may not qualify unless properly licensed.

Nationwide’s cash indemnity structure avoids this problem. You can pay anyone for care, including family members, once benefits begin. The payment goes to you, not the provider, eliminating licensing requirements.

Conflicting assessments occur when the insurance company’s independent evaluator contradicts your physician’s certification. Insurance companies often send nurses to conduct in-home assessments. If you are having an unusually good day or the assessment is superficial, the evaluator may conclude you can perform ADLs independently.

Having a family member or caregiver present during the assessment ensures the evaluator sees realistic care needs. Providing the assessor with detailed care logs showing daily assistance needed helps document your actual condition.

Pre-existing condition exclusions apply during the first 6 months of coverage. If you receive benefits for conditions that existed but were not disclosed on your application, benefits may be denied until 6 months after the policy effective date.

Prevention Strategies

Maintain detailed care logs documenting daily assistance needed with specific ADLs. Record who provides care, what tasks they perform, how much time care requires, and why you cannot perform tasks independently.

Request comprehensive physician assessments rather than brief statements. Your physician should complete the insurance company’s certification forms thoroughly, addressing each ADL specifically and explaining the underlying medical conditions causing functional loss.

Conduct formal cognitive testing through neurologists or neuropsychologists if cognitive impairment is your benefit trigger. Self-reported memory problems do not suffice. Objective test results provide compelling evidence.

Work with licensed providers during the elimination period to establish proper documentation from the beginning. Professional providers create detailed care notes that support your claim. Family caregivers during the elimination period may not generate sufficient documentation.

File claims promptly when you first meet benefit triggers. Delays in filing reduce documentation quality as memories fade and conditions change. Filing within 30 days of becoming chronically ill establishes a clear timeline.

Retain long-term care insurance attorneys if denials occur. Attorneys specializing in insurance bad faith claims can appeal denials, request external reviews, and pursue litigation if necessary. California Insurance Code Section 790.03 provides strong bad faith protections for wrongful denials.

Alternatives to Nationwide Long-Term Care Insurance

Self-Funding Through Savings

Individuals with $2,000,000+ in investable assets may choose to self-fund potential long-term care needs. Five years of care at $120,000 annually costs $600,000, representing 30% of a $2,000,000 portfolio.

The advantage is complete flexibility and control over assets. No premiums are paid to insurance companies. Assets remain liquid for emergencies or opportunities. Investment returns may exceed insurance benefits.

The disadvantage is uncertainty. If you need care early in retirement for extended periods, self-funding may exhaust savings that would have lasted for normal expenses. A 67-year-old requiring 10 years of care depletes $1,000,000+ from the portfolio.

Life Insurance with Long-Term Care Riders

Existing permanent life insurance can be modified to add long-term care acceleration riders. The death benefit accelerates to pay for long-term care when needed. If care is not needed, beneficiaries receive the full death benefit.

This option works well for individuals who already own life insurance for estate planning purposes. Adding the rider creates dual-purpose coverage without separate premium commitments.

The limitation is that long-term care benefits cannot exceed the death benefit. Once you exhaust the death benefit for care, no additional benefits exist.

Immediate Annuities for Care

Deferred income annuities purchased in your 60s that begin payments in your 80s create income streams aligned with typical care needs. A $200,000 premium at age 65 might generate $36,000 annually starting at age 85, continuing for life.

If you need care, the income pays for it. If you do not, the income supplements retirement expenses. The guaranteed lifetime income eliminates longevity risk.

The disadvantage is that annuities provide fixed income that may not keep pace with care cost inflation. A $36,000 annual payment in 2045 may cover only a fraction of actual care costs if inflation averages 5% annually.

Medicaid Planning

Intentional spend-down strategies combined with Medicaid qualification provide long-term care financing for individuals with limited to moderate assets. Medicaid pays for nursing home care and, in many states, home and community-based services.

The advantage is that Medicaid continues paying for care indefinitely, regardless of duration. You cannot outlive benefits.

The disadvantages are significant. Medicaid imposes strict asset and income limits, requiring spend-down of most savings. Care options are limited to Medicaid-certified providers, which may have lower quality or availability than private-pay options. Estate recovery allows states to reclaim costs from remaining assets after death.

Family Caregiving Agreements

Personal care agreements formalize payments to family members providing care. Adult children or relatives receive compensation for caregiving services at fair market rates, typically $20-$35 per hour.

These agreements convert countable assets into income while keeping care within the family. The agreement must be in writing before care begins, specify services provided, and pay reasonable compensation for services rendered.

Medicaid scrutinizes these agreements carefully. Payments exceeding fair market value or agreements created after care begins may be treated as improper asset transfers subject to penalty periods.

Reverse Mortgages

Home Equity Conversion Mortgages (HECMs) allow homeowners age 62+ to borrow against home equity. The loan provides cash that can pay for long-term care needs. Repayment occurs when you sell the home, move permanently, or die.

This strategy works well for house-rich, cash-poor individuals who want to age in place. The reverse mortgage provides funds for home health care without requiring loan payments during your lifetime.

The disadvantage is accumulating interest that reduces home equity available to heirs. Reverse mortgages have significant costs, including origination fees, mortgage insurance premiums, and servicing fees.

Do’s and Don’ts When Purchasing

Do’s

Do purchase between ages 50-65 when premiums are affordable but the timeframe aligns with realistic care needs. Waiting until 70 costs 50-100% more in premiums.

Do include at least 3% compound inflation protection if purchasing before age 65. Without compound inflation, your policy loses 2-3% of purchasing power annually as care costs rise.

Do verify partnership certification if asset protection matters. Confirm your policy appears on your state insurance department’s list of approved partnership policies.

Do disclose all health conditions on your application. Omissions or misstatements discovered later can result in rescission or claim denials.

Do work with specialized long-term care insurance agents who represent multiple carriers and can provide objective comparisons. Agents selling only one company cannot provide comprehensive options.

Don’ts

Don’t buy more coverage than you can comfortably afford even during market downturns or income reductions. Letting policies lapse after years of premium payments wastes money.

Don’t rely exclusively on group employer plans without comparing to individual policies. Group plans often lack spousal discounts, provide reduced benefits for home care, and offer only future purchase option inflation rather than compound inflation.

Don’t assume you are uninsurable without applying. Insurance companies have varying underwriting standards. One company’s decline does not mean all companies will decline you.

Don’t forget to implement contingent premium waiver arrangements protecting against lapse due to cognitive impairment. Designate a trusted person to receive premium notices and manage payments if you become unable.

Don’t purchase based solely on premium without considering benefits, financial strength ratings, claims-paying history, and customer service reputation. The cheapest policy may be cheapest because the company denies claims or provides poor service.

Frequently Asked Questions

Does Nationwide long-term care insurance cover home health care?

Yes. Nationwide CareMatters policies cover qualified long-term care services in all settings including home health care, assisted living facilities, adult day care, and nursing homes without restrictions on location.

Can I use Nationwide benefits to pay family caregivers?

Yes. The 100% cash indemnity structure allows you to use benefits however you choose, including paying family members for caregiving services once benefits begin. No caregiver licensing requirements exist.

Are Nationwide long-term care insurance premiums tax deductible?

Partially. Premiums are deductible as medical expenses up to age-based IRS limits if you itemize and total medical expenses exceed 7.5% of adjusted gross income. Self-employed individuals deduct premiums above-the-line.

What happens if I never need long-term care?

Your beneficiaries receive a death benefit. CareMatters products guarantee a minimum death benefit of 20% of the long-term care specified amount even if you never use long-term care benefits.

Can I cancel my Nationwide policy and get my money back?

Partially, depending on timing. Return of premium options exist but include surrender charges that decrease over time. Early cancellation results in receiving only 70-84% of premiums initially, increasing to 100% after 5-10 years.

Does Medicare cover long-term care costs?

No. Medicare covers only short-term skilled nursing facility care (days 0-100) following hospitalization and limited home health care for specific medical conditions. Long-term custodial care is not covered.

How long does Nationwide take to approve claims?

Typically 45-90 days. Claims require physician certification, ADL assessments, plans of care, and medical records. Complete documentation accelerates approval. Incomplete submissions cause delays of 60-120 days or more.

Will Nationwide increase my premiums in the future?

No. Hybrid long-term care insurance like CareMatters provides guaranteed level premiums that never increase throughout the policy life, unlike traditional long-term care insurance with history of 40-60% increases.

What if I move to another state after purchasing?

Coverage continues. Nationwide policies provide benefits nationwide and internationally. However, partnership program asset protection may not transfer to your new state unless reciprocity agreements exist.

Can I purchase Nationwide long-term care insurance for my parents?

No. The applicant must be the insured person. You cannot purchase coverage for someone else. However, you can gift money to parents to purchase their own coverage.