Life Insurance for Someone on SSI

[smartweb2000]

I have a client that is on SSI-Disability income. She say she has been on this since she first came into this country. She was put on SSI disability by her worker since she have 11 children.
She show me her medical report from her doctor that she just had done a month ago and her health is excellent.

She wants to buy $50,000 in life insurance to cover her funeral expense.

Can I sell her life insurance and have anyone run into this before?

 

[dgoldenz]

11 children? Geez...

 

[WinoBlues]

I have a client that is on SSI-Disability income. She say she has been on this since she first came into this country. She was put on SSI disability by her worker since she have 11 children.
She show me her medical report from her doctor that she just had done a month ago and her health is excellent.

She wants to buy $50,000 in life insurance to cover her funeral expense.

Can I sell her life insurance and have anyone run into this before?

Does she want us to pay for that also?
Sorry.

The answer is yes. You can write it. No problem. Have someone else be the owner or find a product that maintains a zero cash value.

 

[GreenSky]

That's great. She comes to this country and immediately the taxpayers must foot the bill. She could afford to have 11 kids but not work? How the hell did we let her in?

Go ahead and apply for insurance but please send me the bill. I'm paying for everything else already.

BTW, cremation is about $1,000. Why would she need $50K.

Rick

 

[Frank Stastny]

Does she want us to pay for that also?

Stop and think about where she is going to get the money to pay the premium.

We already are paying for everything else, we will be paying for that also.

 

[arnguy]

Wait a minute, aren't SSI and SS Disability two different programs administered by the SSA?

 

[houcoogster]

Does she want us to pay for that also?
Sorry.

The answer is yes. You can write it. No problem. Have someone else be the owner or find a product that maintains a zero cash value.

Just a quick question in case I run into this.
Can the SSI beneficiary pay the premiums even though they aren't the owner?

 

[WinoBlues]

Just a quick question in case I run into this.
Can the SSI beneficiary pay the premiums even though they aren't the owner?

I do it that way all the time. No issues. It may be state specific.

I have had the case workers tell the clients to have the ownership changes to a new owner. Now there may be an issue of a look back period.

 

[Newby]

Just a quick question in case I run into this.
Can the SSI beneficiary pay the premiums even though they aren't the owner?

Yes, anyone can pay the premiums. The person on SSI just can't own the policy.

Assigning it to a different owner at the time of going on SSi is risky. Caseworkers DO tell people to do that but it is actually not allowed. The Medicaid caseworkers are often just as informed as the people who answer the phones at 1-800-MEDICARE. Or the IRS for that matter. People don't work for the government because they're geniuses.

There is a 5-year lookback period and the state can (and often does) catch it years later that the ownership was switched within the 5-years. The person will have to pay the money back and possible penalties if they are caught. They lose the insurance plus they wasted several years worth of premiums.

One thing you CAN do if they are healthy enough is to cancel the existing policy and start a new policy with a different owner right from the begining. A new policy is not subject to the 5-year lookback since it was never an asset of the person going on SSI.

I'm definitely not a lawyer so take any of my "free" information as "free" information from an internet forum. Who knows what will work in your state and for your client.

 

[xrac]

Yes, anyone can pay the premiums. The person on SSI just can't own the policy.

Assigning it to a different owner at the time of going on SSi is risky. Caseworkers DO tell people to do that but it is actually not allowed. The Medicaid caseworkers are often just as informed as the people who answer the phones at 1-800-MEDICARE. Or the IRS for that matter. People don't work for the government because they're geniuses.

There is a 5-year lookback period and the state can (and often does) catch it years later that the ownership was switched within the 5-years. The person will have to pay the money back and possible penalties if they are caught. They lose the insurance plus they wasted several years worth of premiums.

One thing you CAN do if they are healthy enough is to cancel the existing policy and start a new policy with a different owner right from the begining. A new policy is not subject to the 5-year lookback since it was never an asset of the person going on SSI.

I'm definitely not a lawyer so take any of my "free" information as "free" information from an internet forum. Who knows what will work in your state and for your client.

Newby, if the policy has no cash value. Is this still a problem if the owner is on SSI when they die. Will the state then demand the proceeds that the insurance company pays out to the beneficiaries? This is not an asset as far as any look back period.