Nationwide CareMatters® Annuity: A New Twist on the Pension Protection Act Conversation
For years, advisors have used Pension Protection Act (PPA) annuities to help clients reposition non-qualified annuity assets into tax-free long-term care benefits.
The concept is simple:
Take a taxable annuity that may no longer fit the client's goals, complete a tax-free 1035 exchange, and create a pool of money that can be used tax-free for qualifying long-term care expenses.
It's a powerful strategy.
But Nationwide CareMatters® Annuity brings something different to the table.
Most PPA Solutions Reimburse Expenses. CareMatters Pays Cash.
Many long-term care linked-benefit products operate on a reimbursement model. Clients incur expenses, gather receipts, submit paperwork, and then receive reimbursement for approved costs.
Nationwide CareMatters® Annuity uses a cash indemnity approach.
Once a claim is approved and the elimination period is satisfied, clients receive their available monthly benefit without the ongoing requirement of submitting bills and receipts. The money is paid directly to the contract owner, creating significantly more flexibility.¹
Family Care Counts
One of the biggest challenges in long-term care planning is that care doesn't always come from a facility.
Many families rely on:
- Spouses
- Adult children
- Friends
- Informal caregivers
With CareMatters Annuity, benefits may be used for family caregivers and informal care arrangements when appropriate under the plan of care. This can give families more options than traditional reimbursement-style programs.¹
A Simpler Underwriting Experience
Another area where Nationwide stands out is underwriting.
Many linked-benefit solutions involve health interviews, extensive medical records, paramedical exams, or lengthy underwriting processes.
CareMatters Annuity was designed to streamline the process.
According to Nationwide, there is:
- No health interview
- No paramedical exam
- No attending physician statement (APS)
- Simplified underwriting questions
- Cognitive screening only when required by age or circumstance²
For many clients, that can mean a faster and less intimidating experience.
Built for Existing Annuity Owners
This may be one of the most overlooked opportunities for advisors.
Millions of dollars remain trapped inside older non-qualified annuities that may have accumulated significant taxable gains over the years.
Instead of simply exchanging those assets into another accumulation product, advisors can now evaluate whether repositioning part of those assets into a long-term care solution makes sense.
CareMatters Annuity allows funding through a tax-free 1035 exchange from an existing non-qualified annuity or life insurance policy.³
The Bottom Line
Most Pension Protection Act annuities solve the same problem:
How do we create tax-free dollars for future care needs?
Nationwide CareMatters® Annuity adds a different angle to that conversation.
Instead of focusing solely on reimbursement for care expenses, it focuses on flexibility:
- Cash benefits paid directly to the client
- Ability to help compensate family caregivers
- Simplified underwriting
- Tax-free long-term care benefits
- Tax-free 1035 exchange opportunities
For advisors already reviewing annuities, CareMatters Annuity may not replace every PPA solution—but it gives you another valuable tool when flexibility matters as much as leverage.
¹ Cash indemnity benefits and flexible use provisions described by Nationwide CareMatters® Annuity product materials.
² Subject to underwriting requirements and cognitive screening guidelines.
³ Available for eligible non-qualified annuity and life insurance exchanges under applicable tax rules.