Life Insurance and Medicaid?
Have Questions About Life Insurance and Medicaid? Here’s What You Need to Know
If you or someone you love is trying to qualify for Medicaid, there are some things you need to know with regards to an existing life insurance policy. When you own life insurance and Medicaid, or qualifying for Medicaid, is a priority, your current policy may or may not affect your qualification chances.
In order to qualify for Medicaid, an individual’s assets can’t exceed $2000. This, however, does not include the value of their home, car or personal property. It could, however, include the cash surrender value of a life insurance policy, if the face value exceeds $1500.
For life insurance and Medicaid, the ‘cash surrender value’ of a policy is the amount of money the insurance provider would pay out if the policy were to be cancelled. So, for instance, if you or the person you know has a policy with a cash value of $700, they will be able to keep the policy and not have it count toward the asset maximum that will allow them to qualify for Medicaid.
If, however, you have life insurance and Medicaid qualification wouldn’t typically be possible because you exceed the asset maximum, there are a couple of solutions. One is for a child or another person to purchase the policy from the person trying to qualify for Medicaid. It does not matter who is actually insured by the policy, it simply matters who is the owner of the policy.
The other option for life insurance and Medicaid, although not always the favorable solution, is to gift the policy to a child or other beneficiary. There will, however, likely be a penalty period for doing so and, therefore, this may not be the best option for you.
To learn more about life insurance and Medicaid, contact an insurance agent whose knowledge of the industry will set you on the right track to satisfying all of your insurance needs.