Life Insurance for Somebody Wanting to Apply to Medicaid

[RookieYankee]

The cash value in a life insurance policy is a countable asset towards Medicaid or extra help.

It's not a separate entity. Anything in cash, savings, checking, non penalty annuity, etc. That is all countable to their state limit.

If the state limit where you are is $2000 and they have $1500 in other assets then they can't have more than $500 CV.

To avoid this problem you can have someone that is not also on mediciad or applying for Medicaid be the owner. Or they have a trust be the owner. That's also subject to state limits. Or assign ownership to a funeral home.

In reality the CV is almost never a problem since it's usually the only countable asset the FE demographic has. And it take a long time to get to $1500 or $2000 CV. Many will borrow from it to keep it from ever getting there too.

It's really not a problem. Just something we have to address and deal with regularly. It's a huge problem is you make it one.

Yeah I found the entire form on medicaid eligibility online as a pdf regarding homes, cars, and life insurance. The guy's wife is back in the hospital as well so it's not looking good for the wife I don't think. I told them that since only the wife is trying to become eligible, the husband can become the owner and medicaid would see that as an spousal allowance, the can make the children the owners as well therefore circumventing the asset portion of the policy from the mother to the children or they can make a funeral home as the irrevocable owner.

I am trying to find a hand out of the information so if I run into this again I can be prepared.