Is this mandatory to sign in order to get term life insurance?

This rider is typically a benefit to the insured. It helps access the death benefit prior to death to pay for care. I'd suggest you speak with the company you purchased the policy from to get more specific details. You can also ask if the policy is available without this rider. If not, you can seek out another insurance carrier if you don't like this provision. If you have already signed for the policy, there is a 'free look' period (at least 10 days, perhaps more) during which you may cancel the policy at no cost.

Yes, it is a requirement to sign over life insurance policy to the NH. I became the owner of my mother's insurance policy in order to avoid this from happening should she have to go into the NH. She still pays the premiums, and I am the beneficiary. Additionally, my mother has made all of her final arrangements with the grave site, paying it in full.

Reddy, how did u become owner? Being a beneficiary does not make u the owner. When someone goes into a NH on Medicaid, Medicaid will make u cash the policy in. Funeral arrangements can be made using a policy but it has to be in the hands of the funeral home. Forget what it's called.