Medical Assistance and a UL or ??

[inreverse]

Medical Assistance allows up to $1500 in policy cash value to be excluded from countable assets, and term policies are not countable. Would a death benefit targeted UL, with a low cash value, then also be excluded as long as the cash value remains under the $1500 limit? What other higher DB, low cash value products with fixed payments are available? I think Genworth had something like this. Any suggestions?

 

[jdeasy]

Medical Assistance allows up to $1500 in policy cash value to be excluded from countable assets, and term policies are not countable. Would a death benefit targeted UL, with a low cash value, then also be excluded as long as the cash value remains under the $1500 limit? What other higher DB, low cash value products with fixed payments are available? I think Genworth had something like this. Any suggestions?

Not quite right. They are not allowed $1500 cash value in a life policy. They are allowed $1500 of cash assets and cash value in a life policy is a countable asset towards that $1500.

It doesn't matter if it's in a UL, whole life, savings account, checking account or whatever. The assets just can't be over $1500.

 

[inreverse]

I have the medical assistance regulations for MN in front of me, if the face amount exceeds $1500, the cash value counts to the burial fund limit of $1500, which is a revocable fund.

If they purchase a life policy or annuity and it is placed in an irrevocable trust, accompanied by a funeral home contract specifying the costs of services and products for that amount, there is no limitation on the amount.

So they could have a life policy with up to $1500 CV, separate from a preneed contract. A high DB, very low CV policy would be very helpful in this situation.

 

[VolAgent]

I have the medical assistance regulations for MN in front of me, if the face amount exceeds $1500, the cash value counts to the burial fund limit of $1500, which is a revocable fund.

If they purchase a life policy or annuity and it is placed in an irrevocable trust, accompanied by a funeral home contract specifying the costs of services and products for that amount, there is no limitation on the amount.

So they could have a life policy with up to $1500 CV, separate from a preneed contract. A high DB, very low CV policy would be very helpful in this situation.

I would keep reading. Something tells me they will go after the DB of that policy as well.

 

[inreverse]

I asked, the death benefit has nothing to do with it, they are looking for accessible cash, that is why a term policy is exempt.

 

[WinoBlues]

I asked, the death benefit has nothing to do with it, they are looking for accessible cash, that is why a term policy is exempt.

That is pretty much what JD is saying.

To answer your question, as I understand it, yes a term or GUL could work.

However, Most term, not all, have huge rate increases down the road or terminate. Most GULs will build some CV at some poit that could become an issue.

Of course if she never owned it to begin with it becomes moot.

 

[VolAgent]

I asked, the death benefit has nothing to do with it, they are looking for accessible cash, that is why a term policy is exempt.

It is exempt from being counted for spend-down as there is no cash value. That does not necessarily mean it is not an asset that could be recouped at the person's passing. You might want to make sure of that as well.

 

[TDFnCali]

I asked, the death benefit has nothing to do with it, they are looking for accessible cash, that is why a term policy is exempt.

I was told a policy of $1500 or less (regardless of type) is allowed & isn't counted against their assets. Anything above 1500, then the CV will count against them.

But if u call medicaid 10 times, u will get 7 diff answers.

Sent via my Sprint Galaxy S4 using Insurance Forums

 

[jdeasy]

I was told a policy of $1500 or less (regardless of type) is allowed & isn't counted against their assets. Anything above 1500, then the CV will count against them.

But if u call medicaid 10 times, u will get 7 diff answers.

Sent via my Sprint Galaxy S4 using Insurance Forums

You were told correctly. That's face amount though. Not the cash value.

 

[TDFnCali]

You were told correctly. That's face amount though. Not the cash value.

Yes a $1500 FA is not counted & neither is the CV counted in a policy that size or smaller (not that it would be much at all), but its not counted....thats what I was told!