Whole life policies have a cash value during its lifetime. That is considered an asset to Medicaid and not allowed if it brings you above the minimum assets you can have on hand. If they discover this they will require that you cash it in immediately and will potentially disqualify you for the period of time that would be covered by the value of the policy. This is a very serious violation. How were you able to buy the policy? If you are on such a limited income I would think there would be no money left for such a policy? You really should have done your research and consulted a Medicaid rep before you did this. Perhaps contacting one now to get out of this mess would be best.
Sheshe - it's a whole life policy that pays the beneficiary 5k? Is it one of those marketed to cover funeral costs? So your paying a pretty low amount each month? Most of these type of policies have all sorts of qualifiers....like you have to live & pay at least 2 or 3 or even 5 years to be fully insured or only a portion of the 5k paid till its owned for years. Look at the fine print.
Whole life from a good company are usually done in 100k, 300k, 500k range. They are part of an overall investment plan.
A 5k policy, sold to folks who cant qualify for term life, well to me sounds like one that is more illusionary. If you have serious health issues - the insurer is betting you'll die before full policy terms are met. I'd bet it doesn't even build up any real cash value (that takes you over the asset limits for medicaid) till decades from now. I'd be more worried that the policy is written such that your beneficiary will likely never to get the 5k payout. Read the fine print!
I don't know about the whole Medicaid thing, but my MIL, who could not get life insurance other than the one the boast about on TV, did in fact purchase one of the 5 thousand dollar policies, intended to help cover funeral expenses when you die. The contract was written that you had to live and pay inti it for a full 5 years to be paid out. She lived 5 years and 11 days, and they did pay the full 5, to the funeral home, which was her intention so there is one success story for you! Again, I'm not sure of the Medicaid rulings on this.
Stacey - yeah! 11days! This is exactly the type of policy I was referring to. I'd bet your mom was a rarity as she made it past the 5 year requirement & she paid her premiums on time. Most don't & it's pure profit for the insurer.....
Angel
Is it one of those marketed to cover funeral costs?
So your paying a pretty low amount each month?
Most of these type of policies have all sorts of qualifiers....like you have to live & pay at least 2 or 3 or even 5 years to be fully insured or only a portion of the 5k paid till its owned for years. Look at the fine print.
Whole life from a good company are usually done in 100k, 300k, 500k range. They are part of an overall investment plan.
A 5k policy, sold to folks who cant qualify for term life, well to me sounds like one that is more illusionary. If you have serious health issues - the insurer is betting you'll die before full policy terms are met. I'd bet it doesn't even build up any real cash value (that takes you over the asset limits for medicaid) till decades from now. I'd be more worried that the policy is written such that your beneficiary will likely never to get the 5k payout. Read the fine print!