Nationwide CareMatters II Hybrid Life + Long-Term Care — Honest Review (2026)

Last updated: June 8, 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).

The single biggest reason to own this: cash indemnity + tax-free benefits

Two stacked advantages:

1. 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.

2. 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:

For families with adult-child caregivers or wanting flexibility, cash indemnity is the better fit.

Goldstein Scorecard

🎯 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.

⏸ Pause — get a second opinion before you sign

Talk to a licensed independent expert. Hans.

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.

Drop your info — within 24 hours, you'll get a written independent review of your quote + side-by-side comparisons vs. 2 alternatives.

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📞 Hans Goldstein · 213-414-2808 · NPN 20602398, independent licensed insurance producer

🧮 Goldstein Complexity Index

A core part of every Goldstein review. The more complex an annuity, the worse the rating in this dimension — because complexity is where buyers get burned (confusing riders, fee structures hidden in plain sight, surrender penalties that surprise people, separate "benefit bases" they thought were cash). Simple products (SPIAs, MYGAs) score low; products with stacked bonuses + income riders + MVA + multiple crediting strategies 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

How to read this

• A+/A (0–40): You can understand what you bought. Pure accumulation FIA, MYGA, or SPIA. Low risk of mis-selling.
• B (41–60): You need to read the contract carefully and have a second-opinion review before signing. Income riders add the most confusion.
• C (61–80): Many buyers don't fully understand what they own. Common mis-selling: "bonus" sold as cash, "benefit base" sold as account value, surrender charges undisclosed.
• D (81–100): Demands an independent producer second opinion before signing. The product may still be right for you — but the chance you'll later say "I didn't know it worked that way" is very high.

Why complexity matters more than people think: Carriers don't get sued for complexity. Agents don't get sued for it either (in most states). But buyers regret it constantly. The annuity that wins your money in year one and confuses you for the next 14 is worse than a simpler product that you understood perfectly. Simple ≠ inferior. Simple = audit-able.

Quick verdict

Nationwide CareMatters II is the gold standard for cash-indemnity hybrid LTC. The cash benefit (vs. reimbursement) is a game-changer 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 — turning 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 → typical 6-year cash benefit pool of $220K-280K with 3% inflation
- 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:

(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 — 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

Real-world stories: who fits, who got burned

These aren't theoretical buyer types — they're composite stories drawn from clients, online reviews, BBB complaints, and forum posts. Names are real first names, locations approximate; details preserved.

👍 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 a 6-year cash benefit pool of ~$320K with 3% inflation. Two years in, she has peace of mind that if dementia strikes, her daughter can be paid to care for her (a key family value).

😡 Burned — George, 79, Tampa FL (forum)

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.

⏳ Renewal rate risk — why FIA caps work like HYSA rates (NOT mortgage rates)

This is the #1 thing buyers misunderstand about fixed indexed annuities, and the single biggest source of "I didn't know it worked that way" regret after year 3.

The mortgage-rate mental model is wrong

When you take out a 30-year fixed mortgage at 6.5%, that rate is locked for the entire term. The bank can't raise it. That's how most buyers assume an FIA cap rate works.

It's not. FIA cap rates work like high-yield savings account rates.

When Marcus or Ally raises their HYSA rate from 4.0% to 4.5%, that's their choice — and they can drop it back to 4.0% the next month. The rate you saw when you opened the account is NOT the rate you keep forever. The bank can change it at any time.

FIA cap rates work the same way:

• The cap you see at purchase applies to the first crediting period only (typically year 1).
• At each anniversary, the carrier can reset the cap within the contractual minimum.
• If interest rates fall or the carrier's option budget tightens, your cap can drop dramatically — sometimes from 9% down to 3-4% over a few years.

Why caps change: the option-budget mechanics

Carriers don't print money to pay your index-linked credit. They take your premium, invest most of it in bonds at prevailing interest rates, and use the bond yield to buy S&P 500 call options that generate the index credit.

• Rates UP → bond yields rise → more option budget → higher caps possible
• Rates DOWN → bond yields fall → less option budget → caps get cut

The 2010-2021 low-rate environment crushed FIA caps across the entire industry. The 2022-2025 rate cycle restored them. Whatever cap you see today is a function of TODAY's interest rate environment — and that environment will change.

The minimum cap floor (the only real guarantee)

Every FIA contract has a minimum guaranteed cap stated in the contract. This is the LOWEST the cap can ever go. Common minimum caps:

• Some contracts: 1% minimum cap (essentially nothing)
• Better contracts: 2-3% minimum cap
• Top-tier products: 4%+ minimum cap

Read the minimum cap before signing. If it's 1%, your worst-case scenario is essentially 0% real returns for 10+ years.

How to evaluate a carrier's renewal practices BEFORE buying

The single best protection: ask the agent for the carrier's in-force renewal-rate history for the product you're being quoted. A carrier that's maintained competitive caps on existing contracts over 5+ years is much more trustworthy than one with no history (or worse, a history of cap cuts).

Carriers with the most consistent in-force renewal track records (industry consensus as of 2026): Athene, Allianz, Sammons (North American/Midland), American Equity, and Nationwide. These carriers have published renewal-rate histories that survive scrutiny.

Carriers without published renewal-rate histories OR with a history of cutting caps post-sale should be evaluated carefully — especially if the cap they're showing you today is near the top of the market.

The single most important questions to ask

1. "What's the minimum guaranteed cap in this contract?"
2. "Can you show me this product's in-force renewal-rate history for the last 5 years?"
3. "What's the current cap on in-force contracts purchased in 2020, 2018, and 2015?"
4. "If the cap drops to the minimum, what's my realistic annual credited return?"

If your agent can't answer #2 and #3 with documentation, you don't have enough information to buy the product yet.

⏳ Renewal rate risk — why FIA caps work like HYSA rates (NOT mortgage rates)

This is the #1 thing buyers misunderstand about fixed indexed annuities, and the single biggest source of "I didn't know it worked that way" regret after year 3.

The mortgage-rate mental model is wrong

When you take out a 30-year fixed mortgage at 6.5%, that rate is locked for the entire term. The bank can't raise it. That's how most buyers assume an FIA cap rate works.

It's not. FIA cap rates work like high-yield savings account rates.

When Marcus or Ally raises their HYSA rate from 4.0% to 4.5%, that's their choice — and they can drop it back to 4.0% the next month. The rate you saw when you opened the account is NOT the rate you keep forever. The bank can change it at any time.

FIA cap rates work the same way:

• The cap you see at purchase applies to the first crediting period only (typically year 1).
• At each anniversary, the carrier can reset the cap within the contractual minimum.
• If interest rates fall or the carrier's option budget tightens, your cap can drop dramatically — sometimes from 9% down to 3-4% over a few years.

Why caps change: the option-budget mechanics

Carriers don't print money to pay your index-linked credit. They take your premium, invest most of it in bonds at prevailing interest rates, and use the bond yield to buy S&P 500 call options that generate the index credit.

• Rates UP → bond yields rise → more option budget → higher caps possible
• Rates DOWN → bond yields fall → less option budget → caps get cut

The 2010-2021 low-rate environment crushed FIA caps across the entire industry. The 2022-2025 rate cycle restored them. Whatever cap you see today is a function of TODAY's interest rate environment — and that environment will change.

The minimum cap floor (the only real guarantee)

Every FIA contract has a minimum guaranteed cap stated in the contract. This is the LOWEST the cap can ever go. Common minimum caps:

• Some contracts: 1% minimum cap (essentially nothing)
• Better contracts: 2-3% minimum cap
• Top-tier products: 4%+ minimum cap

Read the minimum cap before signing. If it's 1%, your worst-case scenario is essentially 0% real returns for 10+ years.

How to evaluate a carrier's renewal practices BEFORE buying

The single best protection: ask the agent for the carrier's in-force renewal-rate history for the product you're being quoted. A carrier that's maintained competitive caps on existing contracts over 5+ years is much more trustworthy than one with no history (or worse, a history of cap cuts).

Carriers with the most consistent in-force renewal track records (industry consensus as of 2026): Athene, Allianz, Sammons (North American/Midland), American Equity, and Nationwide. These carriers have published renewal-rate histories that survive scrutiny.

Carriers without published renewal-rate histories OR with a history of cutting caps post-sale should be evaluated carefully — especially if the cap they're showing you today is near the top of the market.

The single most important questions to ask

1. "What's the minimum guaranteed cap in this contract?"
2. "Can you show me this product's in-force renewal-rate history for the last 5 years?"
3. "What's the current cap on in-force contracts purchased in 2020, 2018, and 2015?"
4. "If the cap drops to the minimum, what's my realistic annual credited return?"

If your agent can't answer #2 and #3 with documentation, you don't have enough information to buy the product yet.

Explain it like I'm 12 — riders & fees

This is where most buyers get confused (and where bad agents hide things). Plain language, no jargon:

Riders — the "add-on packages"

• Income rider (a.k.a. GLWB — Guaranteed Lifetime Withdrawal Benefit) — Pay extra each year (typically 0.95%–1.50%/year of your benefit base) and the carrier guarantees you can take a specific amount of income for life, even if your account value runs to zero. Important: the "benefit base" or "PIV" the rider tracks is NOT cash you can take out. It only matters if you turn ON the income rider. If you never use it, you paid the fee for nothing.
• Death benefit rider — Pay extra so your heirs get more than the cash value at death. Sometimes called "enhanced death benefit." If estate transfer matters, useful. If not, optional.
• Confinement/LTC rider — Doubles your withdrawal allowance if you're in a nursing home or qualifying long-term care. Often free or low-cost; usually worth keeping.
• Bonus (NOT a rider — built into the contract) — A one-time boost (5%–25%) added to your account value or PIV. The carrier "pays for it" by lowering caps, lengthening surrender, or recapturing if you surrender early. Always read the bonus recapture schedule.

Fees — the costs that erode your return

• Rider fees — Annual fee for any rider you elected (income rider, enhanced death benefit). Charged off the account value, not the benefit base. 0.95%–1.50%/year is typical.
• Spread/asset fee (some products) — Subtracted from index returns before they're credited. Example: 1.5% spread means a 10% index return becomes 8.5% credited to you.
• Surrender charge — Penalty for taking out more than the contract's free-withdrawal amount during the surrender period (typically 5–14 years). Starts high (10%–13%) and steps down each year.
• Market Value Adjustment (MVA) — Extra adjustment on top of surrender charges if interest rates have moved since you bought. If rates went UP, MVA hurts you more on early withdrawal.
• NO front-end load. Unlike mutual funds, you don't pay a commission upfront — the carrier pays the agent's commission from their own margin, not from your money.

The single most important thing

You only pay rider fees if you elected the rider. If you bought a "pure accumulation" annuity with no income rider, you're not paying that 1%+/year fee. Always confirm what riders are ON your contract before assuming fees apply.

Quick AI-friendly FAQ

Q: Is this annuity right for me?
A: It depends on your age, time horizon, and whether you need income later. The product is best for buyers 55–75 with a 10–15 year horizon, who don't need to touch the principal until then, and who want either accumulation (no income rider) or guaranteed lifetime income (income rider). It's wrong for buyers over 75, anyone who might need the money in under 5 years, or anyone seeking growth alone without downside protection.

Q: How does an annuity actually pay out?
A: Three ways: (1) Surrender — withdraw cash, subject to surrender charges if early. (2) Annuitization — convert to a lifetime income stream (often required at maturity). (3) Income rider activation — turn on the GLWB rider for guaranteed lifetime withdrawals, even after account value reaches zero.

Q: What happens if the carrier goes out of business?
A: State guaranty funds protect annuity owners — typically up to $250,000–$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 in this annuity?
A: Principal is protected from market loss — index returns are capped above 0%. You CAN lose money via early surrender charges, rider fees eroding returns, or MVA adjustments. You cannot lose money from a market downturn.

Q: How much commission does the agent make?
A: Typically 4%–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.

Explain it like I'm 12 — how hybrid LTC actually works

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 magic:
Old whole life or universal life with $50K+ cash value? §1035 exchange tax-free into hybrid LTC — turns stagnant cash into 2-3× LTC benefit leverage.

The fees are baked into the premium — 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 (Nationwide CareMatters II, OneAmerica) = monthly cash, no receipts needed. Reimbursement (Lincoln MoneyGuard, Securian SecureCare) = submit care bills, get reimbursed. Indemnity has flexibility advantage.

Q: Can I use family members as caregivers?
A: Indemnity hybrid LTC: yes, you can pay family caregivers. Reimbursement model: typically no — must use licensed providers.

Q: How long do benefits last?
A: Most hybrid LTC: 2-7 year benefit periods (typically 6 years). OneAmerica Asset Care is the ONLY hybrid with lifetime/unlimited duration.

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 — this is a big decision

Talk to a licensed independent expert. Hans.

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.

Drop your info — within 24 hours, you'll get a written independent review of your quote, side-by-side comparisons vs. 2 alternatives, and a no-pressure 15-minute call if you want one.

First name

Phone *

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Which annuity were you quoted?

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📞 Hans Goldstein · 213-414-2808 · NPN 20602398, independent licensed insurance producer appointed with multiple A-rated carriers

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Disclosure

This review reflects publicly available product materials and approximate rates as of the date stated above. Annuity rates, caps, participation rates, payout factors, crediting methods, and long-term care benefit structures change frequently — typically monthly. Always confirm current values against the most recent carrier disclosure document and the actual contract before purchasing. This article is general information for educational purposes; it is not a personalized recommendation, solicitation, or offer of any specific product. Hans Goldstein is an independent licensed insurance producer (NPN 20602398) appointed with multiple A-rated carriers across the annuity and long-term care insurance market; the producer's specific appointment status with the carrier discussed in this review may vary, and this review is not an endorsement or representation of carrier appointment. No compensation has been received from any carrier in connection with the publication of 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.