Nationwide is contributing to a mini boom in the long-term care planning market by introducing an annuity designed with LTC needs in mind.
Clients who already have health problems may be able to qualify to buy the annuity and use it to pay for care, according to Nationwide.
The Columbus, Ohio-based mutual insurer has been selling life insurance policies with LTC benefits for years. The new product is its first annuity-LTC product.
Other companies have been rolling out LTC planning tools in recent weeks.
What it means: Life and annuity issuers are trying to find ways to help clients cope with the biggest threat to their post-retirement finances other than death itself.
The backdrop: Traditionally, LTC planners liked the ability of stand-alone long-term care insurance to maximize the amount of LTC protection per dollar spent.
Other planners liked the ability of life insurance-based LTC hybrids to help clients leave a death benefit.
LTC planners have come around to seeing annuity-based LTC products as a way for clients who cannot qualify for stand-alone LTCI policies or who are uncomfortable with LTCI to squeeze as much LTC protection out of each dollar spent as possible.
The Nationwide contract: The new Nationwide product offers a 3% fixed crediting rate.
Clients who need care can collect benefits without submitting receipts or facing limitations on how they use the cash. They also can use the cash to pay family caregivers or to live outside the United States.
Competitors with annuity-LTC hybrids include EquiTrust, Global Atlantic's Forethought and OneAmerica.
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