Medical or Medicare & Life Ins

[Newby]

Yes cash value can affect eligibility for Medicaid, not Medicare. Some states have different rules so check with your state. If the CV does affect it then you can change ownership or irrevocably assign it someone or a funeral home.

I've never heard of a state that would allow changing ownership of an existing policy unless you do it 5- years in advance. Sometimes people can get away with it but you aren't supposed to be able to give assets away.

You can irrevocably assign ownership to a funeral home or funeral trust because that has no lookback for Medicaid and any amount not used for the funeral at the time of death MUST run through the estate which Medicaid will get.

 

[tomoverton0123]

I've never heard of a state that would allow changing ownership of an existing policy unless you do it 5- years in advance. Sometimes people can get away with it but you aren't supposed to be able to give assets away.

You can irrevocably assign ownership to a funeral home or funeral trust because that has no lookback for Medicaid and any amount not used for the funeral at the time of death MUST run through the estate which Medicaid will get.

It's allowed if you do it before they hit the asset limit. Example, some states send letters to all new life policyholders on Medicaid saying if the CV reaches the max allowable limit then you may lose benefits, well of course they freak out. In this case you can easily change ownership and the policy can continue. Now if you're talking about an existing policy with some cash value then there is the 5 year look back on transfers.

 

[Newby]

It's allowed if you do it before they hit the asset limit. Example, some states send letters to all new life policyholders on Medicaid saying if the CV reaches the max allowable limit then you may lose benefits, well of course they freak out. In this case you can easily change ownership and the policy can continue. Now if you're talking about an existing policy with some cash value then there is the 5 year look back on transfers.

That makes sense.

I'm surprised more FE companies don't have Funeral Trusts and/or Estate Planning Trusts like Settlers has. That could eliminate a lot of this.

 

[gordon112]

That makes sense.

I'm surprised more FE companies don't have Funeral Trusts and/or Estate Planning Trusts like Settlers has. That could eliminate a lot of this.

I agree, in these times where the states are strapped and in debt, they are looking for any avenue they can to pay the Nursing home bill. It makes a Funeral Trust a much more valuable tool to sell.

 

[jdeasy]

Cash value in whole life policy is surely a countable asset in any type of medical insurance because its a part of that policy.

If you are going to spam then at least get it right. There is no reason for the cash value to be a countable asset except for medicaid or other state assistance.

 

[Dragline]

LI cash value will affect almost any public assistance program. Look at the cash value accumulations of some of the policies for FE they accumulate pretty slowly. Eligibility people will tell those going through the process to take out some of the cash and spend it - I would rather have them APL for a while and manage the policies that way if possible.

This is good advice.

 

[jacobtn]

Wait medicaid & medicare are different? So if someone is on Medicaid & have a LI policy, what happens? Do they lose their medicaid benefits? Does medicaid have rights to any proceeds after deceased? What effects does it have on the client? Or if ks some link that will explain it all to me, can u post it?

Thx

PS- I have a client that cancelled because she thinks she cant have a policy and another who cancelled a previous policy (Not mines) because of the medicaid issue and now doesnt wanna meet cause of this.

Just list 1 of her kids as the owner of the policy. Have the mother the payer. problem solved