Medicaid & FE Owned by Third Party

[billyg]

I think I know the answer to this but want to bounce it off you.

If a child purchases a FE policy on a parent (owned by the child from the beginning), then that policy would be exempt from Medicaid spend down, correct?

 

[tins]

I think I know the answer to this but want to bounce it off you.

If a child purchases a FE policy on a parent (owned by the child from the beginning), then that policy would be exempt from Medicaid spend down, correct?

If you are talking about the parent being the one on Medicaid, then yes, you are correct. The parent would not own the policy, therefore not have access to the cash value, therefore does not count towards their assets.

 

[billyg]

If you are talking about the parent being the one on Medicaid, then yes, you are correct. The parent would not own the policy, therefore not have access to the cash value, therefore does not count towards their assets.

As I though, but just wanted to be sure. Thanks.

 

[Newby]

That is correct. HOWEVER...depending on your local Medicaid office you still may have to fight them. If the premium is being drafted out of the mother's bank account.

Most Medicaid case workers don't understand "ownership" of life insurance and may still give the family MUCH grief.

 

[WinoBlues]

We get calls from clients or their children where the case worker has told them to change ownership, then do the paperwork. They do not mention look back. Really depends on the case worker, like Newby said.

 

[sshafran]

It's interesting how many people on Medicaid around here tell me, "Well, Medicaid won't allow us to have Life Insurance." So, we talk about someone else owning it, since Life Insurance has an Owner, Insured, Payer, and Beneficiary. I'd say about 4-5xs out of 10, the children are on Medicaid too, and don't want to be owners!

 

[WinoBlues]

It's interesting how many people on Medicaid around here tell me, "Well, Medicaid won't allow us to have Life Insurance." So, we talk about someone else owning it, since Life Insurance has an Owner, Insured, Payer, and Beneficiary. I'd say about 4-5xs out of 10, the children are on Medicaid too, and don't want to be owners!

Then there's that.

 

[Newby]

It's interesting how many people on Medicaid around here tell me, "Well, Medicaid won't allow us to have Life Insurance." So, we talk about someone else owning it, since Life Insurance has an Owner, Insured, Payer, and Beneficiary. I'd say about 4-5xs out of 10, the children are on Medicaid too, and don't want to be owners!

Those are the right cases to either sell Settlers Life Insurance (Medicaid exempt) or an actual funeral home preneed policy (medicaid exempt).

The leaf doesn't fall far from the tree.