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I have some whole life policies with about $8K in cash value. I know that Medicaid does not count term policies in qualifying. I would however, like to know if the cash value of whole life policies can be used as retainable assets and be allowed to keep whole life policies so I can retain death benefits for beneficiary. The face amount of policies are about $30K. In my state the minimum retainable assets amount is $24K for community spouse. I do not want to surrender the policies.

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Cashing in a whole life policy makes the earnings subject to income tax, and if you have already borrowed against it to pay for care, you could end up in the hole for nothing.
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The cash value on while life insurance policies are considered a non exempt asset for Medicaid. It will need to be cashed in and used to pay for her care in advance of her ever getting eligible for medicaid.

you might want to get a jump on this ahead of ever applying for Medicaid so it’s done, spent on Care with solid documentation now.
Doing a cash in or value settlement can take a bit of time depending on the insurer.
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