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Jeanne is right.

My mom is on Medicaid and she is allowed to have a small term life insurance policy (in other words the policy pays out when she dies and a death certificate is submitted to the company). The information on the policy was submitted in her Medicaid application - it was almost 30 pages for the entire policy. In Texas Medicaid, it can be a policy with a face value of under $ 1,500.00 and cannot have any cash value (a NCV term policy). If it had been a whole life policy &/or had a cash value, then it would have needed to be cashed in and spent on her care before Medicaid would pay for her NH.

Your mom's state Medicaid website should have this information on it.

There was no change of beneficiary required either (it goes to a grandchild). Now her policy is completely paid up (she has had this policy since the 1960's) so there is no expense related to maintaining it. BUT if that wasn't the case, I or other family would need to pay the premium to keep it in force.
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I believe that life insurance is considered an asset. All assets should have been listed at the time time she applied for Medicaid. (I know that all of my husband's policies had to be cashed in.)

I don't understand the technicalities of who "owns" a policy, but if this is an asset owned by your mother, I think it should be reported on her next renewal application, if it was overlooked when she originally applied.

BTW, if it is a small policy intended only to cover a funeral, etc. it could be cashed in and the money spent on a prepaid funeral.
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