- 26,147
Mostly. Sometimes. Just stripped one down to a couple hundred Lowered the premium an still guaranteed to age 100.
74 Year Old Female $50,000 In WL
- Thread starter Raider123
- Start date
Mostly. Sometimes. Just stripped one down to a couple hundred Lowered the premium an still guaranteed to age 100.
Some older annuities work the same way...strip them down to the minimum, clients get access to the funds, and keep the DB/LB in force. Found money.
- Thread starter
- #33
Would it be accurate to say to a Medicaid client that want a WL policy," At some point we will have to strip this policy of cash value to keep it from affecting your Medicaid eligibility."
If so, can they just spend the cash or will uncle Sam take it? Also, what if a Medicaid recipient is the beneficiary to someone else's final expense policy. When the insured dies they use most of the money for their final expenses. How could that affect them?
- 17,077
Medicaid does snapshots of net worth on the 1st of every month. They can inherit $100,000 on the 5th of the month and not lose Medicaid benefits as long as they have spent it on allowable things before the 1st of the next month. I've worked with several cases where that actually happened. Usually due to settlements of some kind. They are allowed to prepay their funeral, cemetery, make repairs to their home, buy furniture, clothes, watches (even Rolex), buy a special needs vehicle if they need one, etc.
They can not give the money away or invest it.
If you know they are involved with Medicaid you should encourage a separate policy owner from day one. They can't transfer the owner later because that is considered giving away assets. Other than that, do a Settlers Funeral Trust policy if that fits them OR do any WL policy with the intention of irrevocably assigning it to a funeral home later when the cash builds up.
You should be able to keep them on Medicaid by stripping the cash from the policy but it causes all sorts of problems due to things like 1. Insurance Companies don't move fast enough for Medicaid and 2. The caseworkers don't understand what you are doing and will give the family a lot of grief.
- 26,147
What Newby said. Also have to watch look back periods when transferring ownership.
In the case I quoted she is not on any kind of aid. Just needed some cash. The point was not all ULs implode with changes. Many of the old ones do, but not all.
- Thread starter
- #36
How would one go about irrevocably assigning it to a funeral home?
- 26,147
With an irrevocable assignment form. Your upline would be a good source of information.
- 3,165
So Newby, in addressing this issue & doing whats best for the client...should we be asking every single prospect are they or do they think they will in the future be on medicaid?? It only comes up about 5% of the time right now when Im in a clients home.
- 17,077
I know of some agents that make extra sales by bringing it up.
It's up to you if you want to do it.
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There is a form. And the funeral director has to be agreeable with it.
It's up to you if you want to do it.
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There is a form. And the funeral director has to be agreeable with it.
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- Thread starter
- #40
Wow...she had about 10 different offers for insurance in the mail. Some were term (AARP) which is convertible at age 80 to fully paid up whole life. I don't think it is a bad product, but I have found most clients don't really understand what they are buying. The $50,000 of term at $183 seemed kind of high anyway.
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Wow...she had about 10 different offers for insurance in the mail. Must of had something to do with her cancelling her $500,000 term for $500/month that was coming to the end of term, Some were term (AARP) which is convertible at age 80 to fully paid up whole life. I don't think it is a bad product, but I have found most clients don't really understand what they are buying. The $50,000 of term at $183 seemed kind of high anyway.
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