My understanding is whole life as it has cash value has to be cashed in. As it’s cash value is an asset. Then that $ used for spend down before Medicaid eligibility.
Term is different. It is the face value of the property that counts. Even if the death value end up more, like way way more. It’s all about face value for application. But states can place a qualifier on value of term life policy. Like if over a set value - maybe 5k or 25k will totally depend on your state law/administrative code - state may require them (state) to be added as the primary beneficiary and if after death & term insurance payout to state any $ left then it goes to the other beneficiaries. But otherwise, term gets paid to whomever is beneficiary and outside of probate unless deceased estate is named as beneficiary. My dad, who died 1980’s, had it this way as the thought was the wee little widow could not possibly handle finances so it would go to probate as an asset of the estate with probate atty taking care of $ issues.
GULs seems depends on how the overall group policy done. I think a lot of GUL stop payout like age 80. So not an issue for Medicaid as they aged out of the life insurance before Medicaid ever got applied for. I’ve found maybe 1 article on GULs and Medicaid, seems it’s not common.
Carnett, your elders LTC insurance policy will eventually run out. What then? Do they have enough $ to private pay for NH? NH expect to be paid in full each month. Whether private pay or Medicaid. They aren’t going to wait to get paid from a life insurance policy. You need to have a plan for when LTC insurance defunds imo.
If long term insurance is paying the way then no. If Medicaid gets involved than yes. When Medicaid is applied for, any insurance policies with cash value will need to be cashed in to offset cost of care. These are policies paid for by the recipient. Employer owned and those with no cash value are not included, to my knowledge. I have never heard of a policy being involved in an estate. Usually, there is a beneficiary and that beneficiary receives the money. Not sure what happens when that beneficiary is a Community spouse.
My GFs stepmother died leaving her life insurance to her daughter, only child, 100k. Assuming her daughter would use what was needed for her funeral. The daughter didn't and nothing could be done because it was now the daughter's money. She could not be made responsible for any of her mother's bills.
A good question would be, if SMom had been on Medicaid in a nursing home how would this have worked out. The policy was thru her employer. Could Medicaid come after the daughter?
Who is “they”? If they is Medicaid, the life insurance policy has to be cashed out if it has cash value. If it doesn’t have cash value then Medicaid will go after after it during the estate recovery process if the Medicaid recipients estate is beneficiary of the policy.
Term is different. It is the face value of the property that counts. Even if the death value end up more, like way way more. It’s all about face value for application. But states can place a qualifier on value of term life policy. Like if over a set value - maybe 5k or 25k will totally depend on your state law/administrative code - state may require them (state) to be added as the primary beneficiary and if after death & term insurance payout to state any $ left then it goes to the other beneficiaries. But otherwise, term gets paid to whomever is beneficiary and outside of probate unless deceased estate is named as beneficiary. My dad, who died 1980’s, had it this way as the thought was the wee little widow could not possibly handle finances so it would go to probate as an asset of the estate with probate atty taking care of $ issues.
GULs seems depends on how the overall group policy done. I think a lot of GUL stop payout like age 80. So not an issue for Medicaid as they aged out of the life insurance before Medicaid ever got applied for. I’ve found maybe 1 article on GULs and Medicaid, seems it’s not common.
Carnett, your elders LTC insurance policy will eventually run out.
What then? Do they have enough $ to private pay for NH? NH expect to be paid in full each month. Whether private pay or Medicaid. They aren’t going to wait to get paid from a life insurance policy. You need to have a plan for when LTC insurance defunds imo.
My GFs stepmother died leaving her life insurance to her daughter, only child, 100k. Assuming her daughter would use what was needed for her funeral. The daughter didn't and nothing could be done because it was now the daughter's money. She could not be made responsible for any of her mother's bills.
A good question would be, if SMom had been on Medicaid in a nursing home how would this have worked out. The policy was thru her employer. Could Medicaid come after the daughter?