Nationwide CareMatters II: 2026 Review of the 100% Cash Indemnity Hybrid LTC Leader

Nationwide CareMatters II is the best-known pure cash indemnity hybrid long-term care product in the U.S. market. Unlike most competing hybrid policies that pay benefits against submitted receipts, CareMatters sends you cash once your claim is triggered — no documentation, no restrictions, and you can use it to pay a family member as your caregiver. Here's an independent analysis of how it works, who it fits, and when it beats the alternatives.

What Nationwide CareMatters II is

CareMatters II is a linked-benefit (hybrid) long-term care insurance policy — a permanent universal life insurance contract with an accelerated LTC rider. The core mechanics are:

• You fund the policy with a lump-sum or series of fixed payments
• The premium purchases a "specified amount" — the total LTC benefit pool available to you
• If you need long-term care and satisfy the benefit trigger, you receive monthly cash benefits drawn from the specified amount
• If you never need care, your beneficiaries receive the specified amount as a life insurance death benefit
• Even if you exhaust the full specified amount through LTC claims, a residual death benefit equal to 20% of the original specified amount is paid to your beneficiaries²

The benefit trigger follows IRC §7702B: the insured must require substantial assistance with at least 2 of 6 Activities of Daily Living (ADLs) — bathing, dressing, eating, toileting, transferring, continence — or have a severe cognitive impairment certified by a licensed healthcare practitioner. Once triggered, benefits flow monthly until the specified amount is exhausted or the insured recovers.

Nationwide has offered linked-benefit LTC products since the 1990s and CareMatters II is the current flagship iteration, consistently ranking among the top two or three hybrid LTC products in independent adviser comparison reviews.

The 100% cash indemnity structure — the defining feature

The most significant distinction between CareMatters II and most competing hybrid LTC products is the benefit payment structure. This is not a minor administrative detail — it meaningfully changes how your coverage works in practice.

Reimbursement-based policies (which includes most traditional standalone LTC policies and some hybrid products) pay benefits against submitted receipts for qualified LTC expenses. You receive the lower of your actual incurred costs or your daily/monthly benefit cap. If you have a light week of care, you receive a lower benefit check.

CareMatters II pays 100% cash indemnity. Once your claim is triggered and approved, you receive your full monthly benefit amount every month — regardless of whether your actual care costs are higher, lower, or different in nature. You do not submit receipts. Nationwide does not audit how you spend the money.

For most buyers, this is the right structure. A fixed monthly cash benefit is simpler to plan around than a variable reimbursement amount. It also eliminates the administrative burden of receipt tracking and expense documentation during what is typically an already-stressful caregiving period.

The informal caregiver benefit

CareMatters II's 100% cash indemnity structure has a practical implication that goes beyond administrative convenience: you can pay an informal caregiver, including a family member, neighbor, or friend.

Because Nationwide places no restrictions on how you use your monthly cash benefit, you can direct that money to whoever is providing your care — including your adult child, spouse (in some scenarios), or a trusted neighbor. The only requirement is that a U.S.-licensed healthcare practitioner must include informal care as part of your certified plan of care.³

This is a meaningful distinction from reimbursement-based policies. Under a reimbursement structure, care provided by unlicensed family members typically doesn't qualify as a reimbursable expense — so your benefit checks are tied to formal agency care. Under CareMatters II's indemnity structure, once the monthly benefit is yours, you decide how it's allocated.

The practical value: informal care can often provide more total care hours per dollar than formal agency care. A family member providing help with bathing, dressing, and meals at $25/hour covers more of your day than a home care agency billing $35–$50/hour with scheduling minimums. If your care situation is likely to involve family participation, the indemnity structure extracts more coverage value from the same monthly benefit amount.

Coverage options and benefit structure

CareMatters II allows meaningful customization across its key coverage dimensions:

How the specified amount and monthly benefit relate

The specified amount is the total dollar pool you are purchasing. The monthly benefit = specified amount ÷ benefit period (in months). For example, a $360,000 specified amount with a 6-year (72-month) benefit period produces a $5,000/month LTC benefit. With a 3-year (36-month) period, the same $360,000 produces $10,000/month. The choice between a longer benefit period at lower monthly benefits versus a shorter period at higher monthly benefits depends on which scenario you're most concerned about: long-duration cognitive impairment or high-cost intensive care.

The 90-day retroactive elimination period

CareMatters II has a 90-calendar-day elimination period — but it works retroactively, which is meaningfully different from how most traditional LTC policies handle the elimination period.

With a standard 90-day service-day elimination period (common in traditional LTC insurance), you pay for 90 days of care out of pocket before insurance begins. Those 90 days can represent $27,000–$54,000 in out-of-pocket costs at current care rates, and with home care on a part-time schedule, a "service day" elimination can take months of calendar time to satisfy.

CareMatters II uses calendar days — all 90 days count regardless of how much care you received on each day. More importantly: once the 90-day calendar period is satisfied, the first benefit payment includes a retroactive catch-up covering the prior 90 days plus the current month.⁴

This is not as clean as Lincoln MoneyGuard's true zero-elimination-period structure (MoneyGuard benefits begin at claim approval with no waiting period). But CareMatters' retroactive mechanic is substantially better for buyers than a traditional 90-day elimination period where the out-of-pocket costs are permanent. If you have 90 days of liquid reserves to bridge the gap, the retroactive EP works well in practice.

CareMatters Together — the couples-specific product

In addition to the individual CareMatters II policy, Nationwide offers CareMatters Together, a joint-life linked-benefit product designed specifically for couples.⁵

The mechanics differ from buying two individual CareMatters II policies:

• Shared benefit pool: Instead of each spouse having a separate specified amount, CareMatters Together provides one combined benefit pool that either insured can draw from, in any combination. If one spouse uses the full benefit, the other spouse can still access the remaining shared pool.
• Total benefit pool: The couple selects a total number of full monthly benefit payments — 48, 72, or 96 months — which defines the shared pool. With a 96-month shared pool, the couple has up to 8 combined years of LTC coverage available.
• Same indemnity structure: Cash indemnity, informal caregiver flexibility, and no receipt requirements carry over from the individual product.
• Death benefit: A tax-free death benefit passes to beneficiaries after both spouses have passed if the LTC benefit pool has not been fully used.
• Underwriting: Each applicant undergoes individual underwriting; the product is most cost-efficient when both spouses receive preferred health ratings.
• Issue ages: 30–70 for both applicants.

CareMatters Together competes directly with OneAmerica Asset Care's shared care rider and with buying two individual policies with a shared care feature. The key trade-off: a shared pool is efficient if care needs are concentrated in one spouse, but a couple where both spouses need concurrent long-duration care can exhaust a shared pool faster than two individual policies with separate benefit periods. For the statistical majority of couples — where one spouse needs substantial care and the other doesn't — the shared structure is cost-efficient.

For an in-depth discussion of couples-specific LTC planning, see our spousal LTC planning guide and our analysis of the shared care rider.

Tax treatment of CareMatters II in 2026

CareMatters II qualifies as a tax-qualified long-term care insurance contract under IRC §7702B. The tax treatment:⁶

• Benefits received are tax-free up to the HIPAA per diem limit of $430/day ($156,950/year) for 2026. For indemnity-style policies, the per diem limit applies to the daily benefit amount — if your monthly benefit is $9,000 ($300/day equivalent), the full benefit is excludable without itemizing actual expenses.
• Premiums are partially deductible. The LTC portion of CareMatters II premiums may qualify for HIPAA age-based medical expense deductibility ($500/$930/$1,860/$4,960/$6,200 for the five age brackets in 2026). Because CareMatters II is a hybrid life+LTC product, only the allocable LTC portion — not the full premium — is potentially deductible. See our LTC tax deduction guide for the age brackets and business owner deduction options.
• 1035 exchanges can fund the policy tax-free. If you hold an existing life insurance policy with a cash value above your cost basis, you can fund CareMatters II via a direct IRC §1035 exchange without recognizing the gain. The exchange must be direct (insurer to insurer) and the receiving product must qualify under §7702B. See our 1035 exchange guide.

Note that CareMatters II's life insurance chassis is best suited for a 1035 exchange from an existing life policy. If you are funding with non-qualified annuity cash value, OneAmerica Asset Care's annuity chassis may produce a more favorable exchange structure — this is a scenario where a fee-only advisor's carrier comparison adds significant value.

Who Nationwide CareMatters II fits

CareMatters tends to be the right answer when:

• Your most likely care scenario involves family caregivers. If you expect a spouse, adult child, or other family member will be providing hands-on care — even part of the time — the 100% cash indemnity structure lets you compensate them directly without bureaucratic hurdles. This is CareMatters' clearest competitive advantage.
• You want planning simplicity. A guaranteed monthly cash amount, no receipts, no documentation — the policy behaves more like a fixed income source than an insurance reimbursement system. Easier for families to plan around than tracking reimbursable expenses during a care event.
• You're doing a single-premium or limited-pay life insurance 1035 exchange. CareMatters' life chassis makes it well-suited for exchanging existing life insurance cash value into LTC coverage.
• You have a couple where both want coverage under one shared pool. CareMatters Together is one of the few products designed explicitly as a joint coverage solution with a flexible combined benefit pool.
• Your household assets are roughly $500K–$2.5M. Large enough to fund a meaningful policy but below the self-fund-only threshold for most households. At $3M+ liquid, a fee-only advisor will often recommend self-funding as the primary strategy.

CareMatters is typically not the right answer when:

• You want Partnership LTC policy protection. Like all hybrid linked-benefit products, CareMatters II is generally not eligible for state Partnership programs, which provide dollar-for-dollar Medicaid asset disregard. If Partnership protection is a priority, traditional standalone LTC insurance (Mutual of Omaha, Thrivent, New York Life) is the right product type. See our Partnership LTC guide.
• You're doing a 1035 exchange from a non-qualified annuity chassis. OneAmerica Asset Care's annuity chassis often handles annuity-to-LTC exchanges more efficiently than a life chassis product. Request illustrations on both before deciding.
• You need maximum pay flexibility. Lincoln MoneyGuard Fixed Advantage offers single-pay, 5-pay, 10-pay, and ongoing payment — more options than CareMatters for buyers who want to spread funding across different periods.
• You want a zero-day elimination period. MoneyGuard's no-elimination-period structure is cleaner than CareMatters' retroactive 90-day EP. If your liquid reserves can't cover a 3-month bridge period, MoneyGuard's structure is meaningfully better for your situation.
• Your assets exceed $3M+ liquid. At that level, the LTC exposure is a manageable tail risk. A fee-only advisor serving high net worth households will typically recommend self-funding as the core strategy, potentially with a thin catastrophic policy.

CareMatters II vs. Lincoln MoneyGuard vs. OneAmerica Asset Care

These three products dominate the hybrid LTC market. Here's an objective comparison of the key trade-offs:

None of these products is the universal winner. The right carrier depends on your specific funding source, care scenario, and planning priorities. Nationwide CareMatters II wins on indemnity purity and family caregiver flexibility. Lincoln MoneyGuard wins on pay flexibility and elimination period structure. OneAmerica Asset Care wins on annuity exchange efficiency and couples shared care design. Getting competing illustrations run by a fee-only advisor — one who has no carrier preference — is the only way to see which product pencils out best for your specific inputs.

The commission structure — and why it matters for CareMatters evaluations

First-year commissions on single-premium hybrid LTC products like CareMatters II typically run 5–8% of premium. On a $200,000 single-premium deposit, an agent can earn $10,000–$16,000 in a single transaction. This creates well-documented selection pressure:

• Agents who earn commissions on CareMatters have no economic incentive to recommend traditional LTC insurance (lower commissions on smaller recurring premiums) or self-funding (no product sold)
• Agents who earn commissions on a specific product often present only that product — you may not receive a side-by-side comparison of CareMatters vs. MoneyGuard vs. OneAmerica with your specific age and health inputs
• The gap between "good for the client" and "good for the agent" is larger on single-premium hybrid products than almost any other financial product category

This doesn't make CareMatters II a bad product. For buyers who fit the profile, it is genuinely the best available option. But it does mean that most buyers who receive a CareMatters recommendation from a commissioned agent have not seen:

• A self-fund analysis showing at what asset level the risk becomes manageable without insurance
• A traditional standalone LTC comparison — which typically provides more LTC coverage per dollar because there's no death benefit to price in
• A cross-carrier hybrid comparison showing how CareMatters, MoneyGuard, and Asset Care compare at their specific age, gender, and health class

A fee-only advisor runs all of these scenarios before recommending any product. See our hybrid LTC insurance guide for the full framework, and our carrier comparison page for how CareMatters fits alongside traditional and other hybrid options.

1. Nationwide Life Insurance AM Best rating: AM Best maintains an FSR of A+ (Superior) and Long-Term ICR of "aa-" (Superior) for Nationwide Life Insurance Company and affiliates, stable outlook. Nationwide — Company Ratings; affirmed December 2023 per AM Best. BusinessWire — AM Best affirms life affiliates, December 2023
2. CareMatters II 20% residual death benefit: CareMatters II guarantees a residual death benefit equal to 20% of the original specified amount, even if the full LTC benefit pool has been depleted by claims. Compare Long Term Care — Nationwide CareMatters II
3. Informal caregiver benefit and plan of care requirement: CareMatters II permits benefit payments to informal caregivers including family members, provided a U.S.-licensed healthcare practitioner certifies informal care as appropriate in the plan of care. Skloff Financial Group — CareMatters II review, March 2025
4. CareMatters II retroactive 90-day elimination period: Once the 90-calendar-day elimination period is satisfied, the first LTC benefit payment covers the prior 90 days (retroactively) plus the current benefit month. RiskQuoter — CareMatters II review; Skloff Financial Group — CareMatters II review
5. CareMatters Together joint product: Nationwide CareMatters Together is a joint-life linked-benefit LTC product providing a shared benefit pool (48, 72, or 96 months of combined monthly benefits) for couples, with 100% cash indemnity, guaranteed premiums, and a death benefit. Issue ages 30–70. Nationwide — CareMatters Together
6. 2026 HIPAA LTC per diem and premium deductibility limits: IRS Rev. Proc. 2025-28 establishes the 2026 per diem exclusion at $430/day and age-based eligible premium deductibility limits ($500/$930/$1,860/$4,960/$6,200). IRS Rev. Proc. 2025-28

Product features, AM Best ratings, and tax values verified as of June 2026. Benefit illustrations are examples only — actual values depend on age, gender, health class, and state of issue at time of application. Consult a licensed specialist for personalized illustrations.