- 26,079
They do not require annual Financial disclosures in your state? They sure do in California.
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DI Cant Buy Life Insurance? 2 Questions
- Thread starter LaughDontCry
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They do not require annual Financial disclosures in your state? They sure do in California.
- 19,579
They can't cancel it but they can stop paying.
Lapse or cancel? Doesn't really matter. They don't have the policy any more.
Lol we sell insurance . It's not are job to give advise on any tax or other financial matters. Better keep your e@o uo.Since cash values grow tax free and are never reported to the govt how would anyone know what there cash values are?75% of the people I write Fe on are on Medicaid and all the people they know are also on Medicaid . So having another owner does no good .Im not here to argue about things such as this. My only job is to be a stone cold selling machine.
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- 6,134
You are wrong on this. I've seen several times the cash value came up and had to be xfered to another owner to keep Medicaid.
I'm not saying it doesn't come up but what I've saying its not my concern.If it becomes a problem and the client calls me and asks me to check it out I will. But when I go in and sell a policy off the bat its not my job nor my place to advise people on issues of there eligibility for Medicaid. Every policy that you sell to a person on Medicaid do you tell them that in a few yrs there life insurance cash value could hinder there benefits?
- 26,079
Yes. Also bring it up when we talk about beneficiary.
- 6,134
OK I understand now. Thought you meant it doesn't happen. My bad!
When they apply for Medicaid or have a Medicaid review they have to reveal all assets including life insurance policies. Failure to do so can result in loss of Medicaid benefits and even subject the person to prosecution for medicaid fraud.
Here is an article on how life insurance is treated..
Can Life Insurance Affect Your Medicaid Eligibility? | ElderLawAnswers
Settlers used to have a nice product that was written through the Huff-Cook Burial association. It was WL but had no cash value. The only non forfeiture value was reduced paid up insurance; therefore it did not interfere with Medicaid.
- 17,063
They have to do a Medicaid review every 12months. If they have over $2,000 total countable assets they no longer qualify for Medicaid. Happens all the time. Cash value of life insurance is a countable asset. Just like a savings account is.
If they give any asset away in order to qualify for Medicaid that is considered Medicaid fraud. There is a five year look back on that. They can not legally make any other individual person the owner of their policy to keep the cash value from disqualifying them. They will often get caught doing that and lose their Medicaid benefits retroactively.
Here's what they can do:
1. They can take a loan against the cash value and document that they spend the money on things Medicaid allows. Home repairs. Furniture. Medical bills. Funeral or cemetery expenses. One automobile if they drive. These are all allowed.
2. They could irrevocably change ownership and beneficiary to a funeral home with no look back period. This is allowed because it's not giving it away it's exchanging it for a contract for future services. If the policy has more death benefit than the funeral bill it can not go to a beneficiary. It must go to their estate and Medicaid will get anything that goes through the estate.
3. If they are healthy enough to qualify for a new policy, you can sell them another policy with a different owner from the very beginning. Medicaid can not count it as their asset if they have never owned it.
I'm not an attorney. I am a licensed Funeral Director as well as an insurance agent. These are things that we deal with every day in funeral homes. But always check with an attorney in your state before acting on anything you read on a forum. It could very well be incorrect for your state or your situation.
If they give any asset away in order to qualify for Medicaid that is considered Medicaid fraud. There is a five year look back on that. They can not legally make any other individual person the owner of their policy to keep the cash value from disqualifying them. They will often get caught doing that and lose their Medicaid benefits retroactively.
Here's what they can do:
1. They can take a loan against the cash value and document that they spend the money on things Medicaid allows. Home repairs. Furniture. Medical bills. Funeral or cemetery expenses. One automobile if they drive. These are all allowed.
2. They could irrevocably change ownership and beneficiary to a funeral home with no look back period. This is allowed because it's not giving it away it's exchanging it for a contract for future services. If the policy has more death benefit than the funeral bill it can not go to a beneficiary. It must go to their estate and Medicaid will get anything that goes through the estate.
3. If they are healthy enough to qualify for a new policy, you can sell them another policy with a different owner from the very beginning. Medicaid can not count it as their asset if they have never owned it.
I'm not an attorney. I am a licensed Funeral Director as well as an insurance agent. These are things that we deal with every day in funeral homes. But always check with an attorney in your state before acting on anything you read on a forum. It could very well be incorrect for your state or your situation.
- 4,299
In Texas there are still a handful of companies that sell "stipulated premium" policies. They are a lot like the old Huff-Cook policies - WL but no cash value, (can only be written in Texas, to Texas residents). These are very useful for this type of situation. I mainly use Western American Life (Richardson, TX).
