CareMatters review

It depends on why you are buying it. If you want a conventional fixed annuity for accumulation, CareMatters is not the right fit — the mandatory LTC charge will erode net growth, and there are simpler, lower-cost options for that purpose. If you are specifically looking for a vehicle that combines retirement savings with LTC risk mitigation, and you have nonqualified dollars to deploy, CareMatters deserves a close look. The structure is clean, the carrier is strong, and the death benefit protection means the money is not simply consumed if you stay healthy.

The rational case for CareMatters is that long-term care insurance is expensive and often unavailable to people with existing health conditions, but doing nothing about LTC risk is also a serious financial exposure. This product gives buyers a middle path: commit nonqualified savings to an annuity that earns at least 3% guaranteed, and in return gain access to enhanced LTC benefits if care is ever needed. The optional Inflation Protection Benefit (5% compound) makes the case stronger for buyers who are concerned that care costs will rise significantly before they need coverage. The LTC Nonforfeiture Benefit is a meaningful add for buyers who worry about letting their policy lapse.

I think CareMatters is best for a buyer in their late 50s or 60s who has nonqualified savings they are unlikely to need for living expenses, has not been able to qualify for traditional long-term care insurance, and wants to address LTC risk without completely removing assets from their estate. It is not a fit for someone whose main goal is growth, someone using qualified funds, someone in California, Florida, New York, or the other excluded states, or someone who may need access to their full principal within ten years.

You are buying a hybrid contract — part fixed annuity, part LTC funding mechanism. The annuity wrapper earns interest at a guaranteed floor rate and holds your premium. The mandatory LTC benefits rider converts that account value into a leveraged LTC benefit pool if you ever qualify for care. In plain terms: the annuity keeps your money growing slowly while giving the insurance company a small monthly charge in exchange for the promise to pay out enhanced LTC benefits if you need them. If you never need care, your heirs get the account value. If you do need care, the benefit payout typically exceeds what you would have accumulated through interest alone.

CareMatters uses a single fixed account that credits interest at a rate no lower than 3% annually. Each month, Nationwide deducts an LTC charge from the account value. The charge is based on your age, sex, and underwriting class at the time of issue, and it is guaranteed not to exceed the interest credited in the prior month — meaning the charge alone cannot eat into your original premium in any single month.

If you need qualifying long-term care, the contract pays a monthly benefit from an available benefit pool that is typically larger than your account value. The benefit amount depends on the contract terms and the optional riders you selected at issue. The optional 5% compound Inflation Protection Benefit increases the monthly benefit over time; that benefit requires an upfront separately identifiable rider premium. The optional LTC Nonforfeiture Benefit preserves a reduced benefit if you stop paying charges; it also requires an upfront premium. Current LTC charge rates were not disclosed as a fixed number in the brochure — they vary by individual — so get a personalized illustration to understand what you would actually pay monthly.

The death benefit structure is the secondary reason people buy this product. If you never need long-term care, your beneficiaries receive the full account value of the annuity — subject to ordinary income tax on gains. That is meaningfully different from traditional LTC insurance, which pays nothing if you stay healthy. The annuity wrapper essentially creates a heads-I-win-tails-I-still-win structure: care benefits if you need them, account value if you do not. That structure is part of why CareMatters commands attention, even with a 10-year surrender period attached.

CareMatters is a 10-year commitment. Free withdrawals of up to 10% of beginning-of-year contract value are available starting in year 2 — there are no free withdrawals in year 1. Amounts above 10% are subject to the surrender charge schedule below. There is no market value adjustment on this product, which is a modest benefit compared to some fixed annuities.

One important nuance: any withdrawal reduces the amount of available LTC benefits. If you withdraw frequently for living expenses, you shrink the care coverage pool, which partially defeats the purpose of the product. Think carefully before using the free-withdrawal provision routinely.

Because this product is nonqualified only, RMDs are not a consideration — there are no required minimum distributions from a nonqualified annuity contract.

The monthly LTC charge is the primary cost. It is deducted from account value each month and varies by issue age, sex, and underwriting class. The guarantee that the monthly charge cannot exceed prior-month interest credited protects you from principal erosion through charges alone — but it also means the net interest benefit to your account value could be minimal depending on your individual charge rate and the credited rate. At the 3% guaranteed minimum, you may be crediting roughly 25 basis points per month, and the LTC charge will consume some portion of that.

The optional Inflation Protection Benefit (5% compound) and LTC Nonforfeiture Benefit each require an upfront separately identifiable premium — these are real additional costs to factor into the decision. If you add both, your total outlay at issue will be higher than the $36,000 minimum premium for the base annuity.

There is no base contract fee and no income rider fee. The tradeoffs are mostly about opportunity cost: this is not a product that will outpace a competitive MYGA on a net-of-charges basis, and it should not be evaluated on that basis.

Legal Entity: Nationwide Life and Annuity Insurance Company

Parent: Nationwide Mutual Insurance Company

AM Best Rating: A+