(i) only the cash value a policy with face value over $1,500 is countable for Medicaid eligibility purposes, and (ii) unless the beneficiary of the policy is the estate of the insured, the state cannot go after the proceeds following the death of the insured.
As other have said term insurance has no cash value being built up over the years. My mom had a $10,000 whole life policy and when she went on Medicaid , the policy had a roughly a $4,000 cash value. The $4000 was counted as an asset. Make sure her policy has a beneficiary listed . If not.., upon death, the $30,000 would be considered as part of her estate and medicaid may be able to take what's left after funeral expenses.
this policy will not prevent you from getting medicaid but at her death medicaid will ask for the value of the policy. they will say it is to be paid to them for reimbursement for funds they have paid. good luck
Agree with previous answers. Also, you might want to have her transfer ownership of the policy to you. That way she can't change the beneficiary to someone else on a whim or under someone's influence.
Agree with all other answers here. We had the same situation when my mother went into a NH on Medicaid. I filled out the application for her and simply included a copy of the policy showing that it had no cash value. Her only income was a small social security check, and my dad was still alive and likewise living only on a small social security check. So Medicaid allowed her income to stay with my dad, and he continued paying the premium on it. This was in Florida, and I should add that her income was only allowed to stay with him because they were very low income with no assets and to take her income from him would have left him indigent.
Don't know if my long answer went through... just saying that simply adding a beneficiary might not remove the policy from the deceased estate. You would probably need a life insurance trust to do that. See an estate planning lawyer in your State.
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