What's Happening?
Nationwide has introduced the Nationwide CareMatters Annuity, expanding its long-term care (LTC) portfolio. This new product is designed to assist retirees and pre-retirees in safeguarding their assets
against the increasing costs of extended care. The annuity combines guaranteed growth with LTC coverage, addressing the concern of many Americans who struggle to find affordable solutions for future care needs. Nationwide's research indicates that nearly 60% of consumers worry about financing LTC, with only a small fraction having a dedicated plan. The CareMatters Annuity builds on Nationwide's existing suite, offering simplified underwriting and flexible funding options, including 1035 exchanges from non-qualified annuities or life policies. Holly Snyder, president of Nationwide's life insurance and LTC business, emphasized the importance of making LTC coverage attainable for more Americans while providing control over care options.
Why It's Important?
The introduction of the CareMatters Annuity is significant as it addresses a major threat to retirement security: the high costs of long-term care. By offering a product that simplifies LTC planning and provides predictable growth, Nationwide is helping consumers protect their retirement savings without sacrificing liquidity or guarantees. The annuity's cash indemnity structure allows clients to use benefits flexibly, aligning with consumer preferences for straightforward and predictable solutions. This development is crucial for financial professionals who can now offer clients a tool to reposition idle assets and integrate LTC planning into broader retirement strategies. The tax-free nature of qualified LTC benefits further enhances the product's appeal, potentially allowing clients to withdraw their entire contract value without triggering ordinary income taxes.
What's Next?
Nationwide's new annuity option is expected to influence the LTC market by providing a unique annuity-based solution. Financial advisors may increasingly recommend this product to clients seeking to protect their retirement savings from LTC costs. The flexibility and simplicity of the CareMatters Annuity could lead to broader adoption among consumers and advisors, potentially reshaping LTC planning strategies. As the demand for accessible LTC solutions grows, Nationwide's approach may prompt other insurers to develop similar products, further expanding the market for hybrid LTC solutions.
Beyond the Headlines
The launch of the CareMatters Annuity highlights a shift towards more consumer-centric LTC solutions, emphasizing simplicity and control. This trend reflects broader changes in the insurance industry, where products are increasingly designed to meet the evolving needs of consumers. The focus on cash-based benefits and flexible care options may also influence cultural attitudes towards LTC planning, encouraging more proactive approaches to retirement security.
