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The surviving spouse is in LTC on Medicaid? If so, the policy will need to be cashed in and used for surviving spouses care. Medicaid will stop, spouse will need to spend down and reapply for Medicaid.

If the dying spouse was the one on Medicaid and the Community spouse was the beneficiary, then its the Community spouses money. I know that a beneficary of an insurance policy is under no obligation to pay debts of the person named on the policy. Not sure how that is when the beneficary is a spouse. This is a good question for Medicaid.
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