My father is terminal and was given 6 months. He has a life insurance policy but has been placed in the nursing home, will they become the beneficary of the policy? We live in Texas
The beneficiary listed on the life insurance policy receives the money.
Texas requires that any life insurance policy can't have a face value of more than $1500. before a person is eligible for Medicaid. Had my FIL lived longer and needed to apply for Medicaid we would have had to cash in his whole life policy for its cash-in value and apply that money towards his care.
Thank You I believe we will be bringing him home next week and calling in Hospice. Thanks for all your answers and concerns. Please pray for us and the strength to face what is ahead. Thanks!!
RRcc - None of this is easy. Hospice is a wonderful resource and if you can make it work within your family and everybody understands what "comfort" care is.
Insurance is sticky for being an asset. There are issues in whole vs term and in ownership. Most elderly are on the policy as being the owner of the policy so it is an asset. BUT you DO NOT have to own your policy, others can own the policy and this is how you get around it being an asset, you just need a good financial advisor & attorney to get this worked out. I have "key-man" insurance policy and the business technically is the owner of my life insurance policy and pays the premiums. Did this years ago before I even had to think about dealing with Medicaid issues for my mom. Now whole life policies usually build up a cash value and have to be cashed in before Medicaid can happen. Term policies don't and are POD to whomever is the beneficiary. I have heard that some states are requiring the Medicaid recepient to have the Medicaid program be a beneficiary but I bet this will face legal challenges.
Regarding hospice, if you haven't chosen the hospice group, one thing to consider is if they have a end-of-life hospice facility. My MIL was in the panhandle and her hospice was at a freestanding hospice facility adjacent to the hospital. She went there after being in a NH and was there about 2 weeks before she died. For my mom, we have preselected VITAS for her hospice when her MD decides it is time. Vitas has a free-standing facility where she lives in central TX, and again, if need be she can be transferred there for the final, final, final days. If your dad might be one who needs serious class 3 or 4 pain medications (like opiates), an in unit hospice facility will work better as the go-to-your home hospice staff usually don't carry the big time pain drugs on them. Just something to think and ask about.
Don't forget that for a veteran, your father can get a burial plot, opening and closing, a casket and a headstone for free. It is just the funeral/embambing that they don't pay for. But you can have the insurance proceeds signed over to the funeral home otherwise Medicade will come after it. As a POA you cannot change the beneficiery situation. It sounds good as it is. .
Great question. If your father is on Medicaid, the state can most likely take the life insurance policy pay-out during the asset recovery phase (after the parent passes away). Medicaid can take all of the proceeds except for what may be used for funeral, burial, and estate settlement expenses. The state of Kansas said they were even entitled to receive my father's VA life insurance benefit. (Shocking!) The VA says the state can't touch it. Still don't have an answer, yet we continue to pay the premiums. Because my father is on Medicaid and Hospice, and he had the $10k policy upon admission, again, we the unpaid caregivers are forced to hire an attorney to sort these details out. Don't know how being under Hospice care can over-rule whatever your state;s Medicaid mandates. Can an attorney please chime in here? Thanks again for posting this very important question. Good luck to all of you and your families.
i agree with Jeanne regarding bringing in Hospice care. In regards to the life insurance policy, it probably all depends on if your father has any outstanding debts. Debts are paid before inheritance is given to the beneficiaries.
If dad is over 65 I assume he has Medicare. Medicare covers Hospice. With a terminal diagnosis with 6 months to live he will qualify for Medicare. Have him evaluated by a Hospice for movement to a hospice unit.
If the policy was surrendered as an advance payment, the NH would refund the unused portion. So if it was a $50K policy, but the nursing home bill is more than that, the family will not see any money. On the other hand, if the NH bill was only $10K, the balance of $40K will go to the named beneficiary.
Texas requires that any life insurance policy can't have a face value of more than $1500. before a person is eligible for Medicaid. Had my FIL lived longer and needed to apply for Medicaid we would have had to cash in his whole life policy for its cash-in value and apply that money towards his care.
Insurance is sticky for being an asset. There are issues in whole vs term and in ownership. Most elderly are on the policy as being the owner of the policy so it is an asset. BUT you DO NOT have to own your policy, others can own the policy and this is how you get around it being an asset, you just need a good financial advisor & attorney to get this worked out. I have "key-man" insurance policy and the business technically is the owner of my life insurance policy and pays the premiums. Did this years ago before I even had to think about dealing with Medicaid issues for my mom. Now whole life policies usually build up a cash value and have to be cashed in before Medicaid can happen. Term policies don't and are POD to whomever is the beneficiary. I have heard that some states are requiring the Medicaid recepient to have the Medicaid program be a beneficiary but I bet this will face legal challenges.
Regarding hospice, if you haven't chosen the hospice group, one thing to consider is if they have a end-of-life hospice facility. My MIL was in the panhandle and her hospice was at a freestanding hospice facility adjacent to the hospital. She went there after being in a NH and was there about 2 weeks before she died. For my mom, we have preselected VITAS for her hospice when her MD decides it is time. Vitas has a free-standing facility where she lives in central TX, and again, if need be she can be transferred there for the final, final, final days. If your dad might be one who needs serious class 3 or 4 pain medications (like opiates), an in unit hospice facility will work better as the go-to-your home hospice staff usually don't carry the big time pain drugs on them. Just something to think and ask about.
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