How much does it cost to add Shared Care to Nationwide's great CareMatters II product? You'll be surprised!

Claude Thau

8/1/2023 · 4 min read

Clients will love Nationwide’s Care Matters Together product, which is available for ages 30-70 in all USA jurisdictions other than AZ, CA, DC, MT, & NY. (Under some circumstances, residents in those states might purchase coverage in another state. Read the attached “non-resident sales form” carefully.)
How much do you think it costs to add Shared Care to Care Matters II by moving to Care Matters Together?
Couples who are both preferred risks (which goes through Table 4) can add Shared Care yet SAVE 12% to 32% compared to the combined pay-to-100 cost of two separate CM II policies. (I looked at all same age combinations but no combinations where the couple were not the same age.) Why?
a. CM Together avoids the first death benefit, including avoiding the minimum 20% residual benefit. But the death benefit on the second death is 50% higher* if there have been no claims.
b. The death benefit on the second death is lowered If the first-to-die had a LTC benefit and the minimum death benefit is only 10%. On CMII, the benefits paid to the first spouse to die would be deducted from that spouse’s death benefit, not from the death benefit of the second spouse to die.
c. The premium does not drop on the first death. However, the combined premium is waived if either is on claim; on CM II, the life premium is never waived (and the LTCi premiums are waived only for pay-to-100).
d. CM Together has no critical illness or terminal illness benefits.
*The death benefit is spread over 3 years (vs. 2 for CM II) and you must add 1-, 3- or 5-year extensions of benefit, so the total combined benefit period can be 4, 6 or 8 years. Nationwide doesn’t want to risk incurring more than an 8-year maximum claim for any individual.
Simplified Underwriting applies in the sense that they do an interview (with a cognitive screen for applicants 60 and older or for cause). But medical records are required at the underwriter’s discretion.
Preferred goes up to Table 4! Standard goes to Table 8, but at least one spouse must be preferred. Someone who does not qualify for CMII might still qualify for CMT if their partner is preferred.
For Standard, the death benefit is spread over 4 years, so the same monthly maximum produces 33.3% more death benefit. (The BPs are still 4, 6 or 8 years.)
If we quote both preferred and one turns out to be standard, we have a much higher premium and we have to explain the larger death benefit. As CM Together has a second-to-die death benefit, the death benefit is expected to be paid on the healthier life. Thus, Nationwide seems to be demanding more life insurance on the healthier person to help balance the LTC risk for the “standard” risk.
If there is any doubt about health, it is important to pre-qualify. If either is worse than Table 8 or if both are worse than Table 4, we have a decline. Also if one is standard and the age difference is more than 10 years, we have a decline.
Who can be insureds:-spouses/domestic partners, business partners, parent/child combination as long as they comply with the age difference requirements, siblings, cousins, etc. Except for parent/child or business partners, they must live together at time of application.
The maximum age difference is 25 years if both are preferred, but 10 years if one is standard.
The minimum initial monthly maximum is $1500 (SD: $3,100; VT: $2,325; WI: $1,860). The maximum is $20,833. That’s a range of Specified Amount from $54,000 to $750,000.
§1035 exchanges and qualified rollovers are available to both CM II and CM Together. As CMT is a joint policy, the typical approach is to move into a single premium immediate 10-year annuity which then funds the CMT policy annually.
Payments options are single premium, 5-pay, 10-pay, 20-pay and to age 100 of the older insured with full joint WP.
LTCi tax breaks are attractive because the second-to-die DB is a relatively small portion of the premium.
International benefits are nice because they are paid for up to 3 years (if both are preferred) and up to 4 years if one person is standard.
Compounding is 0%, 3% for 20 years, 3% forever or 5% forever.
The EP is the same as CM II: 90 days but benefits are then paid retroactively.
There is no ROP.
Page 19 of the Nationwide illustrations shows alternatives that can be purchased with the same premium and page 8 shows how much of the premium could be tax-preferred.CMT FAQ
Care managers help clients understand the policy at claim time, submit claim, create a plan, find local providers, and deal with recertification and changes in needs.
If you don’t have a BackNine marketing manager, yet you can get your free website in less than a minute by registering HERE , then click here to schedule a meeting with me so I can help customize it and give you a tour of our administrative website Why CMT? Non-resident sales form. CMT UW process CMT Consumer Guide Compare CM II and CMT CMT Product Specs