Nationwide CareMatters II Hybrid Life + Long-Term Care Review (Checked September 2026)
Written & reviewed by Hans Goldstein, EA, independent licensed insurance producer · CA license 4273294 · NPN 20602398Admitted to practice before the IRS
Product guide re-checked (ICC26-LAM-3097AO.9) · Updated
Checked September 24, 2026: Nationwide's current CareMatters II guide (form ICC26-LAM-3097AO.9) describes long-term care coverage linked to a universal life policy with guaranteed premiums and benefits, a death benefit if care is never needed, and premium schedules from single pay to pay-to-age-100. If scheduled premiums stop, LTC benefits are reduced in proportion to premium paid, with a $250-a-month minimum paid-up benefit.
Not re-verified: the monthly-benefit and benefit-pool figures in the examples below are June 2026 estimates, not Nationwide quotes. Benefits depend on age, sex, health, state, premium schedule and inflation option. Ask for a current illustration.
Reviewed: September 24, 2026
If you've been quoted Nationwide CareMatters II, you're looking at the #1 cash-indemnity hybrid LTC product in the market. Unlike most hybrid LTC products that reimburse you for actual care costs, CareMatters II pays you a monthly cash benefit when you qualify. No receipts required, no care-bill submissions. You can spend it on professional care, family caregivers, or anything else.
Written by an independent licensed producer (NPN 20602398).
What would long-term care actually cost you out of pocket?
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The single biggest reason to own this: cash indemnity + tax-free benefits
Two stacked advantages:
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CASH BENEFIT (unlike reimbursement products): When you qualify for LTC benefits under HIPAA chronic illness rules (2 of 6 ADL deficiency for 90+ days OR cognitive impairment), Nationwide sends you a monthly cash check. You decide how to spend it. Want to pay your daughter to provide care? Allowed. Want to hire informal help? Allowed. Want to use it for grocery delivery and Uber? Allowed.
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TAX-FREE under IRC §7702B + PPA 2006 §844. Every dollar of monthly benefit comes to you free of federal income tax.
Reimbursement vs. cash indemnity comparison:
| Feature | Reimbursement (Lincoln MoneyGuard, Securian) | Cash Indemnity (Nationwide CareMatters II) |
|---|---|---|
| How benefits paid | Submit care bills, get reimbursed | Monthly cash check, no receipts |
| Family caregiver coverage | Usually no | Yes |
| Informal care coverage | Usually no | Yes |
| Documentation burden | High (ongoing receipts) | Low (initial qualification only) |
| Use flexibility | Restricted to covered services | Full flexibility |
For families with adult-child caregivers or wanting flexibility, cash indemnity is the better fit.
Goldstein Scorecard
| Dimension | Grade | One-line take |
|---|---|---|
| LTC benefit duration | B+ | 2-7 year benefit periods available; typically 6 years. Capped, unlike OneAmerica Asset Care's lifetime option. |
| Carrier financial strength | A+ | Nationwide Life Insurance Co: top-tier mutual carrier. |
| Brand recognition | A+ | Nationwide ("On Your Side"): household name. |
| Benefit type | A+ | Cash indemnity: monthly cash, no receipts. Market-leading flexibility. |
| Joint life option | A | Single OR joint life available. |
| Inflation protection | A | 3% or 5% compound inflation options. |
| Premium funding | A | Single, 5-pay, 10-pay, lifetime pay. |
| Elimination period | A+ | 90-day calendar elimination period (but counts only ONCE per benefit period). |
| Return of premium | A- | Vested ROP available; varies by funding method. |
| Goldstein Complexity Index | C (62/100) | Moderate. Joint life option adds complexity; cash benefit mechanics are easier than reimbursement. |
| OVERALL | A | Best-in-class for buyers wanting cash flexibility + joint life. |
Best for: the 55-75 single or couple buyer wanting cash indemnity flexibility (especially if planning for adult-child caregiving), with $50,000+ to commit as single premium or multi-pay.
Look elsewhere if: you want lifetime/unlimited LTC → OneAmerica Asset Care, lowest premium possible → Lincoln MoneyGuard III (reimbursement, no cash flexibility), or you're OK with reimbursement model and want lower premium → Securian SecureCare III.
Goldstein Complexity Index
Every annuity I review gets a complexity score from 0 to 100. Higher means harder to understand. Complexity is where buyers get hurt: riders they didn't know they were paying for, surrender charges that surprise them, and income "benefit bases" they took for cash. SPIAs and MYGAs score low. Products that stack a bonus, an income rider, an MVA and several crediting options score high.
This product's score: 29/100, Grade A (Mostly clear)
One or two complications (a rider, a crediting choice). With a 30-min agent walkthrough, most buyers understand it.
Score breakdown
| Dimension | Score (1-10) | What this measures |
|---|---|---|
| Riders | 5/10 | How many riders, optional or built in (income, death benefit, LTC). Each one adds cost and one more thing to understand. |
| Crediting strategies | 3/10 | How many index options (cap, spread, participation rate, step rate, volatility-controlled indices). More choices are harder to follow. |
| Surrender complexity | 6/10 | Length of the surrender period, plus any MVA and bonus recapture. The longer and more layered it is, the harder it is to know what leaving early costs. |
| Benefit-base separation | 3/10 | Whether there is a separate income base ("PIV") that is not cash but looks like it. This causes more buyer confusion than anything else. |
| Bonus structure | 1/10 | A premium bonus with a recapture schedule. The bonus is real, but you can lose part of it if you leave early. |
How to read this
- A+/A (0-40): Easy to understand. A pure accumulation FIA, a MYGA or a SPIA. Little room for mis-selling.
- B (41-60): Read the contract carefully and get a second opinion before signing. Income riders cause most of the confusion.
- C (61-80): Many owners don't fully understand what they bought. Common mis-sells: a bonus presented as cash, a benefit base presented as account value, surrender charges glossed over.
- D (81-100): Get an independent second opinion before signing. The product may still fit you, but the odds you later say "I didn't know it worked that way" are high.
Why it matters: nobody gets sued for selling a complicated product, but buyers regret them all the time. An annuity that wins your money in year one and confuses you for the next 14 is worse than a simpler one you understood from the start. Simple products are easier to check.
Quick verdict
Nationwide CareMatters II is the gold standard for cash-indemnity hybrid LTC. The cash benefit (vs. reimbursement) matters a lot for families planning around adult-child caregiving or wanting maximum flexibility. The trade-off vs. OneAmerica Asset Care: CareMatters caps LTC duration at 7 years max; Asset Care offers lifetime.
For most buyers, 6 years of cash-flexible LTC beats 6 years of reimbursement-restricted LTC. For risk-averse buyers wanting unlimited duration, Asset Care still wins.
The §1035 exchange play
Same as every hybrid LTC product. If you own underperforming life insurance (whole life, universal life with $50K+ cash value) or non-qualified annuities, you can §1035 exchange tax-free into CareMatters II and turn stagnant cash value into 2-3× the LTC benefit pool.
Worked example: Robert, age 64, owns $80K whole life from the 1990s earning 2.5%:
Surrender + reinvest: ~$10K tax on the gain → ~$70K net
§1035 into CareMatters II: $0 tax → $80K full transfer → estimated 6-year cash benefit pool of $220K-280K with 3% inflation (June 2026 estimate, not a quote)
Bonus: death benefit if LTC unused passes to heirs
Real-world cost example
David & Susan, age 62 & 60, joint life, $150K joint single premium, 6-year benefit, 3% inflation (June 2026 estimates, not a Nationwide quote):
| Year | Monthly cash benefit per spouse | Both spouses simultaneously |
|---|---|---|
| 1 | ~$5,500/month | ~$11,000 combined if both qualify |
| 10 | ~$7,200/month | ~$14,400 combined |
| 20 | ~$9,700/month | ~$19,400 combined |
| 30 | ~$13,000/month | ~$26,000 combined |
(Illustrative: pull exact figures from Nationwide illustration software.)
Strengths
- CASH INDEMNITY: monthly check, no receipts, full flexibility
- A+ Nationwide: top-tier mutual carrier brand
- Joint life option: covers both spouses (one of few hybrid LTC products with this)
- Tax-free benefits under §7702B / PPA 2006
- 3% or 5% compound inflation
- Multiple funding options
- §1035 exchange compatible
Weaknesses
- LTC benefit is CAPPED at 7 years max (typically 6): unlike OneAmerica Asset Care
- 90-day elimination period (vs. Lincoln MoneyGuard III's 0-day)
- Higher complexity for joint life: single life is easier to understand
- Premium higher than reimbursement products for the same nominal benefit (you pay for the cash flexibility)
- Cognitive impairment trigger requires "substantial supervision": interpretation can be subjective
What the brochure doesn't tell you
- Cash indemnity feature is the most-valuable differentiator but adds ~5-15% to premium vs. reimbursement
- 6-year cap is the practical limit for most designs: longer periods cost meaningfully more
- Joint life pricing uses a "single deduction" model: the first spouse to qualify activates benefits for both
- 90-day elimination counts once per benefit period: if you recover and re-qualify, no second waiting period
- Death benefit reduces as LTC is paid out: fully exhausted pool = small residual death benefit
- §1035 exchange play often beats new-cash purchase
Illustrative examples: who fits, who doesn't
These are illustrative composite examples, not real clients. Names, ages and places are invented, and any dollar figures are illustrations, not quotes.
Good fit: Linda, 65, Pasadena CA
Linda wanted to plan for her own potential LTC and have flexibility to pay her daughter as caregiver if needed. Nationwide CareMatters II's cash indemnity benefit meant no receipts, no licensed-caregiver restriction. $125K single premium produced an estimated 6-year cash benefit pool of ~$320K with 3% inflation (estimate, not a quote).
Two years in, she knows that if dementia strikes, her daughter can be paid to care for her (a key family value).
Burned: George, 79, Tampa FL
George bought CareMatters II at age 75. The 90-day elimination period plus 7-year max benefit duration didn't account for his higher actuarial risk of needing care soon. Within 3 years he had a stroke; the 90-day elimination ate into his benefit window. The product is fine for 55-72 buyers; George at 75 was a stretch. Salesperson failed on age-suitability.
The pattern: Nationwide CareMatters II is a good product for the right buyer (typically a 55-67 buyer with a long horizon, no near-term liquidity needs, and realistic expectations) and a disaster for the wrong buyer (typically a buyer whose horizon, liquidity needs, or product-type expectations didn't match what the contract actually does). The product isn't the problem. Buyer/product mismatch is.
Quick FAQ
Q: Is this policy right for me?
A: It fits if you can pass medical underwriting and want insurance, not savings, to pay for long-term care. Compare the monthly benefit, the benefit period and the inflation option against what care costs where you live before you buy.
Q: How does this policy pay out?
A: Benefits are paid when you qualify for care, generally when you need help with 2 of 6 activities of daily living or have a severe cognitive impairment, up to the policy’s monthly limit. Hybrid policies also pay a death benefit if care is never needed; traditional LTC policies do not.
Q: What happens if the carrier goes out of business?
A: State guaranty funds protect annuity owners, typically up to $250,000 to $300,000 per owner per carrier (varies by state). Check your state's guaranty association limit. The carrier's AM Best rating signals failure probability; A-rated carriers have very low historical default rates.
Q: Can I lose money on this policy?
A: Long-term care premiums buy coverage, not investment growth. Hybrid policies return value through a death benefit or return-of-premium terms if care is never needed; traditional LTC does not. Surrendering a hybrid policy early can return less than you paid.
Q: How much commission does the agent make?
A: Typically 4% to 8% of premium for fixed indexed annuities, paid by the carrier (not from your money). Higher commission products often have longer surrender periods or smaller caps. The product cost to you is the same whether commission is high or low, but commission size is a useful proxy for product complexity.
Q: Should I roll over my 401(k) into an annuity?
A: Sometimes yes, often no. Yes if: you want guaranteed income, you're risk-averse, you have other liquid assets for emergencies, and you're 55+. No if: you're under 50, you need liquidity, you have plenty of pension/SS income, or you'd be putting all your retirement assets into one product. Get an independent second opinion before rolling over six figures.
Q: Why are caps so different across products?
A: Trade-offs. Higher cap = lower bonus, longer surrender, lower-rated carrier, or different index strategy. There's no free lunch. A 10%+ cap typically means B-rated carrier + 14-year surrender. A 6% cap typically means A+ carrier + shorter surrender.
Q: How are annuity earnings taxed?
A: Inside the contract, growth is tax-deferred (no tax until you withdraw). Withdrawals are taxed as ordinary income (not capital gains). For non-qualified annuities, only the gain portion is taxable. For qualified (IRA) annuities, the entire withdrawal is taxable. There's a 10% IRS penalty on withdrawals before age 59½.
How hybrid LTC works, in plain terms
A hybrid life + LTC insurance policy combines a life insurance base with a long-term care (LTC) rider. If you need long-term care, the policy pays you tax-free LTC benefits. If you DON'T need care, the death benefit passes to your heirs. No "use-it-or-lose-it" like traditional LTC.
The math:
• Pay a single premium of $100,000 at age 65
• LTC benefit pool: ~$250,000-$300,000 (with inflation rider)
• Tax-free LTC benefits if you qualify (2 of 6 ADLs deficient for 90+ days OR cognitive impairment)
• If you never need care: full death benefit to heirs (~$150K-$200K)
The §1035 advantage:
Old whole life or universal life with $50K+ cash value? A §1035 exchange moves it tax-free into hybrid LTC and turns stagnant cash into 2-3× LTC benefit leverage.
The fees are baked into the premium. There is no separate annual fee.
Quick Hybrid LTC FAQ
Q: Why is hybrid LTC better than traditional LTC?
A: Traditional LTC is use-it-or-lose-it (no death benefit if no care needed) PLUS premiums can increase. Hybrid LTC has a death benefit if unused AND premium is locked at issue.
Q: How are LTC benefits taxed?
A: TAX-FREE under IRC §7702B + PPA 2006 §844 when triggered for qualifying LTC needs.
Q: What triggers LTC benefit payment?
A: HIPAA chronic illness certification: 2 of 6 ADLs (Activities of Daily Living) deficient for 90+ days, OR substantial cognitive impairment requiring supervision.
Q: What's the difference between indemnity and reimbursement?
A: Indemnity (for example Nationwide CareMatters II) pays a set monthly amount without receipts. Reimbursement pays against submitted care bills. Check which one a policy uses before you buy.
Q: Can I use family members as caregivers?
A: Indemnity hybrid LTC: yes, you can pay family caregivers. Reimbursement model: typically no. You must use licensed providers.
Q: How long do benefits last?
A: Most hybrid LTC: 2-7 year benefit periods (typically 6 years). Some policies, such as OneAmerica Asset Care with its optional Continuation of Benefits rider, can extend benefits up to lifetime.
Q: What's the §1035 exchange play?
A: Transfer cash value from existing life insurance or non-qualified annuity tax-free into hybrid LTC. Common 2-3× leverage on LTC benefit pool vs. the cash transferred.
Q: What if I die without needing care?
A: Death benefit (typically equal to or slightly higher than premium paid) passes to heirs. Not a wasted premium.
Who Nationwide CareMatters II actually fits
- Single or couple age 55-75 with $50K+ to commit
- Wants cash-flexible LTC benefits (especially for adult-child caregiving)
- Wants A+ Nationwide brand
- Comfortable with 7-year max LTC duration
Who should look elsewhere
- Want lifetime LTC → OneAmerica Asset Care
- Want lowest premium → Securian SecureCare III (reimbursement, often cheaper)
- Want 0-day elimination + 70% ROP → Lincoln MoneyGuard III
- Wealthy enough to self-insure → may not need LTC policy
Sources
- Nationwide CareMatters II product brochure (2026)
- AAA: American Association for Long-Term Care Insurance reviews
- Long Term Care Insurance Partner: Nationwide CareMatters II
Get a second opinion before you sign
Talk to Hans Goldstein, a licensed independent insurance producer.
Hybrid LTC is a permanent decision committing six figures. Before you sign, is the benefit duration right for your risk tolerance? Is there a §1035 exchange play from an old policy? Get a second opinion before you commit a six-figure premium.
Send your details. Within one business day you get a written review of your quote, a side-by-side with two alternatives, and a free 15-minute call if you want one.
Rather talk it through? Or book 15 minutes on Hans’s calendar, or call 213-414-2808.
Hans Goldstein · 213-414-2808 · NPN 20602398, independent licensed insurance producer appointed with multiple A-rated carriers
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Disclosure
This review is based on the carrier's public product materials and rates as of the date shown above. Annuity rates, caps, participation rates, payout factors, crediting methods, and long-term care benefit structures change often, sometimes monthly. Confirm current figures in the latest carrier disclosure and the contract before you buy. This is general education, not a personal recommendation or an offer of any product. Hans Goldstein is an independent licensed insurance producer (CA license 4273294, NPN 20602398) appointed with several A-rated carriers. His appointment with the carrier reviewed here may vary, and this review is not an endorsement. No carrier paid for this review. Always read the actual contract and consult a licensed advisor before purchasing any annuity or long-term care insurance product. Past index performance does not predict future credited interest. Annuities and hybrid life+LTC policies are long-term contracts with surrender charges; they are not suitable for funds you may need before the end of the surrender period. AM Best ratings and tax treatment are subject to change. Tax discussion of IRC §7702B, §1035, and the Pension Protection Act of 2006 reflects law as of 2026 and is subject to change.