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To be precise: My mother is 84; has had several strokes on both sides (cognitive, ambulatory) and since I work full time, I need to get her signed up for Medicaid-- but even though she owns no property, home or car and no stocks,bonds,401-K, etc she can't get it because she has a tiny little life insurance that comes to about $3,000.00 and change. Apparently you can use a life insurance policy as collateral for a loan, or just cash it out--so they count it as "assets." The cutoff amount is $2,000.00, so at 3000 dollars she has too much in assets.This is making me frustrated, as she would benefit enormously from being at the adult daycare and having interaction with others-- and I would be so relieved to know she was safe, happy, and making friends instead of being alone at home while I have to be away at work all day! Her insurance is in (2) Colonial Penn "units", one @ $1,000.00 and one @ $2,000.00; I am her POA, and they are currently showing myself as her beneficiary. This is how she set it up, before she had her strokes, with me agreeing to use the insurance money to take care of her cremation expenses upon her death. Any suggestions as to how I can deal with this in a legal (!) way and thereby render her eligible for Medicaid?

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Most likely, you'll have to cash out the life insurance. I imagine the amount of cash value - if any- is very minor and would be spent down quickly. As you say, insurance policies are considered assets because the family would benefit from that money after the person's death.

That leaves you without the money to bury her after her death. You could talk with an elder law attorney to see if there's any way around this, since every state is a little different. Good luck,
Carol
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Carol probably knows better than I do but as I was reading your post I was thinking that you could cash out her life insurance policy and use the money for pre-arranged funeral costs, a spend down cost. Medicaid doesn't penalize prepaid funeral costs. Visit Medicaid's website, they have a lot of information there. Information just in general plus information by state.
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