Before applying for Medicaid, you want to make sure you qualify. As we have mentioned in the past, there are several rules that come into play when dealing with Medicaid and one of them is your income and assets. To qualify, you can have no more than $2,400 in countable assets. One thing individuals may not factor in, when determining their assets, is their life insurance policy. Life insurance policies are typically available as either term life insurance or whole life insurance.
Term Life Insurance is just as it states, only available for a certain amount of time and expires at the end of the term. For term life insurance, if you die before the term is up, your beneficiary would receive the death benefit. However, once the term is up, you do not get back the money you put into it. However, when thinking about Medicaid, term life insurance isn’t considered an asset and won’t affect your eligibility for Medicaid.
With whole life insurance, it doesn’t expire and lasts your whole life. Along with that, whole life insurance accumulates a cash value that the owner can access. It must be counted as an asset. If you have whole life insurance, your chances of being eligible for Medicaid are a bit more difficult. To qualify, the face value of your whole life insurance must be less than $1,500. If it is more than $1,500, the cash surrender value becomes an available asset and in return can make you ineligible.
You have a few options:
If you or a loved one need to apply for Medicaid soon, book a call with us today. Let’s discuss what would be the best route for your situation.
Reference: https://attorney.elderlawanswers.com/newsletter/actions/view-content/type/ela/f/9807/id/12421/is-content-hub/3553
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