Underwriting Nationwide’s
LTC Rider
NFM-11193AO.2 For Broker/Dealer Use Only
Disclosures
Keep in mind that as an acceleration of the death benefit, the LTC rider payout will reduce both the death benefit and
cash surrender values. Care should be taken to make sure that your clients’ life insurance needs continue to be met
even if the rider pays out in full. There is no guarantee that the the rider will cover the entire cost for all of the insured’s
long-term care needs as these vary with the needs of each insured
Neither Nationwide nor its representatives give tax advice. Your clients should consult their attorney or tax advisor
If your client is collecting LTC benefits from another company in addition to benefits from Nationwide, the total benefits
that can be received tax free is the greater of the daily HIPAA limits or actual costs incurred. Any amount in excess of
these limits will be taxed as ordinary income
As your clients’ personal situations change (e.g., marriage, birth of a child, or job promotion), so will their life insurance
needs. Care should be taken to ensure these strategies and products are suitable for long-term life insurance needs.
You should weigh your clients’ objectives, time horizon and risk tolerance as well as any associated costs before
investing. Also, be aware that market volatility can lead to the possibility of the need for additional premium in the policy
Underwriting the LTC rider
• LTC underwriting can differ greatly from life
insurance underwriting(referred to as base coverage)
• Life decisions are usually based on primary medical
condition and/or diagnosis. However, if an individual
has multiple medical conditions, the LTC risk may be
compounded
• The assessment of recovery from an impairment and
the resultant level of stability are significant factors in
the overall determination of the risk
Long Term Care Rider Specifications
• The LTC rider is intended to provide an insured with
supplemental long term care coverage
• It is not intended to be the primary source of
financial resources needed to pay for long term care
expenses. It is a rider to a life insurance policy and
should not be construed to be a separate LTC policy
• The underlying death benefit should be the primary
consideration in the overall sale
Available Classes & Ratings
• Preferred Non-Tobacco & Tobacco. Preferred Plus
rates are not available
• Standard Non-Tobacco & Tobacco
• Rated Non-Tobacco and Tobacco(maximum Table E)
• Rated but the face amount of the rider decreased
• Declined. The LTC rider can be rated or declined
even if the base policy is Standard or better
Preferred Class Qualifications
• Preferred classes must be available on the product
requested
• The rate class of the base life policy must be
Preferred or better without the use of Special
Underwriting Programs, such as Wellness Credits
Ratings
• If the base policy is rated, the LTC rider will be rated
at the same rate or higher
• The base policy must qualify for Table E or better on
its own merit without the use of Special
Underwriting Programs, such as Placement
Improvement Program (PIP) or Wellness Credits
• The LTC rider can be rated separately from the base
life policy up to and including Table E (except in NY,
KY and Virgin Islands)
Flat Extra Ratings –Medical Risks
• If the life insurance is rated with a flat extra due to a
medical impairment, the LTC rider may be issued
with a table rating
• Due to the nature of these risks, these will be
reviewed on a case-by-case basis
• The LTC rider will be declined on cases where a flat
extra is being offered due to avocation (i.e. aviation,
motor sports, etc)
Example: Decrease LTC Amount
• 75 year old applying for a $400,000 LTC rider
• This individual is probably more interested in
obtaining LTC coverage as opposed to the underlying
life insurance since the potential pay out of the rider
would probably cover most, if not all, of the monthly
cost of the long term care
• In these circumstances, Nationwide may consider
reducing the amount of the LTC rider
Example: Wellness Credits
• Application for $500,000 life insurance with a
$250,000 LTC rider
• The rating on the life insurance is determined to be a
Table B and the rating for the LTC rider is also
determined to be Table B
• The life insurance rating was “moved” to Standard
with the use of Wellness Credits
• The LTC rider remains at Table B
Example: Wellness Credits
• Application for $1,000,000 life insurance with
$500,000 LTC rider
• The rating for the life insurance is determined to be
Table F
• The rating on the life insurance was “moved” to
Table E with Wellness Credits
• The LTC rider would be declined since the original life
assessment was Table F
Citizenship Requirements
• The LTC rider is only available to US/Canadian citizens
and permanent residents (green card holders) who
plan to reside in the United States without prolonged
periods of time outside the United States
• For those with a green card with plans to
permanently reside in the U.S., we may require their
alien registration number, the number of years they
have lived in the U.S., and information concerning
their employment history
Considerations for LTC
Underwriting
• Cognitive impairment
• Functional capacity – ability to perform ADL’s and
IADL’s
• Mobility – osteoporosis, falls, & fractures
• The use of multiple medications
• Frailty
• Co-morbid conditions – multiple medical problems
which typically are more significant than each
problem alone (i.e. overweight/arthritis, CAD/DM)
Favorable Factors
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Currently working, either full or part-time
A spouse in good health
Family or friends living in the same household
Participation in hobbies & outside activities
The current ability to drive
The ability to travel & visit independently
Exercising several times a week
Situations Suggesting Declination
• Currently receiving disability benefits, social security
income, or Medicaid benefits
• Currently exercising Power of Attorney by another
individual
• ADL & IADL Deficits – requiring the help of another
person to perform ADL’s & IADL’s
• Currently using Long Term Care Services
• Currently using Durable Medical Equipment
Activities of Daily Living
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Ambulating/mobility
Bathing
Control of bladder/bowel (continence)
Dressing
Eating
Toileting
Transferring out of bed or chair
Instrumental Activities of Daily
Living
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Using the telephone
Managing finances
Handling transportation
Shopping
Laundry
Housework
Taking all medications
Preparing meals/cooking
Long Term Care Services
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Assisted Living
Home health care
Nursing care
Adult day care
Other qualified LTC services (i.e. foster home care for
elderly, etc).
Durable Medical Equipment
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Hospital Bed
Stair Lift and or chair lift
Wheelchair
Ventilator/Respirator/Oxygen equipment
4 pronged (quad) cane
Motorized cart
Walker
Height & Weight Guide
• An individual with functional or physical impairment
complicated by their weight is considered a high risk
for the LTC rider
• Overweight associated risks: depression, eating
disorders, HTN, diabetes, cancer, heart disease, back
problems & edema
• Underweight associated risks: frailty, malnutrition,
cancer, depression, eating disorders, and
osteoporosis
Medication Guide
• Any medication taken by a proposed insured may be
significant to the risk
• When an individual is taking 10 or more medications,
the case will be underwritten very carefully
• Medications used for memory loss, moderate or
severe depression, or chronic pain indicate
significant health impairments which will typically
result in declination of the LTC rider
Scenario #1 – Breast Cancer
• History of breast cancer 8 years ago with no
metastasis, no recurrence, and no complications
• Life insurance coverage approved Table B + $5.00 flat
extra for 5 years
• Consider LTC risk at Table D rates (+50 for base
coverage and +50 for flat extra)
Scenario #2 - Aviation
• Private pilot with aviation risk not requiring a rating
• Medical assessment is favorable & he meets
Nationwide’s Preferred criteria.
• We would allow Preferred for both the Life and LTC
rider
• If aviation was assessed with a flat extra, the LTC
rider would be declined
Scenario #3 – Diabetes
• 65 year old male with onset of type II diabetes 12
months ago, treated with oral meds only, diabetes is
well controlled and no co-morbid conditions
present(CAD, obesity, etc.)
• Life insurance policy assessed at Std Non-Tobacco
rates. LTC rider rated Table B for his diabetes
• If diabetes is uncontrolled or recently discovered,
the LTC rider would be declined, even if an offer can
be extended for the base life coverage
Summary
• Similar to life insurance underwriting, the LTC rider is
underwritten on an individual basis
• Underwriting considerations include cognitive
impairment, functional capacity, mobility, frailty, comorbid conditions, and age
• Please call the underwriting team to discuss any long
term care scenario. We are always happy to help!
Questions?
Life insurance is issued by Nationwide Life Insurance Company or Nationwide Life and Annuity Insurance Company, Columbus, Ohio
Nationwide, Nationwide Financial, the Nationwide framemark and On Your Side are service marks of Nationwide Mutual Insurance Company .