My 91 Mom will be switching to Medicaid. What about Life Insurance?

We had to cash my mom's in and prepay her funeral. It was just paltry little policies she had been paying on since the 1960's. We were also told we could set up a "burial account" at the bank to pay for funeral expenses that could not be prepaid. It's just a savings account and the bank typed "burial account" on it. Every year for medicaid renewel you have to turn in a copy of the account so they can see you haven't touched the money.

Just my 2 cents. My Mother's two small policies (bought in the 60s) had cash value so I cashed them in and pre-planned her funeral. If no cash value then can't cash them in. If an employer purchased policy, no need to cash in. And you may want to check if the policy has to read that it is specifically for funeral expenses.

I would not allow a NH to draw Moms SS from her account. You either pay the bill monthly or you allow the NH to become her payee for SS. For me, I didn't want the hassle if any problems with SS after Moms passing so I allowed them to become payee. SS sometimes stop payment prematurely. If that happened, the NH would need to deal with it.

Sorry but no one here has an accurate answer to your question and no one can until you state if it is a term or whole life policy. They are treated different.

The speculation is not correct though.

She won't have any money to pay the premiums. I would check with your local Medicaid and ask for help buying a funeral policy. They have specific rules that are determined state to state.

A funeral home should be able to assist you as well.

No. The government will not take that because people on Medicaid are allowed to have a burial policy. The amount in the policy varies from state to state. Some states it's up to I believe $10,000.
If there is life insurance and the policy dates back past the five-year Medicaid look back period that's safe as well.