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I have to report information to Medicaid on an insurance policy with her late husband as the beneficiary. Is there a reason to even keep this policy? Thanks

Do you think you should speak to an attorney?
Seems to be a lot of informed people here responding.
What a (wonderful and valuable) network this is ! Gena
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Reply to TouchMatters
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kenmtb 12 hours ago
Thanks. I finally found one attorney who was local and wasted $200 on a session that ended with me being asked if they were even helpful. Local attorneys claim they handle elder law but fail to produce a lawyer with those credentials.
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The type of life insurance policy - whether it’s Term, or Whole Life or a GUL (group universal) WILL MATTER. If it is a whole life policy, those build up a cash value. That cash value will be considered an asset by Medicaid and the policy will need to be cashed out and used in her “spend down”.

Whole life policies tend to pay just a fraction of what the face value of the policy. Like a 100K policy may only have built up a cash reserve of 10%-15%. If somehow there are still premiums due and go unpaid, those cash reserves will be used to pay the premiums due. If your elder has been forgetting stuff and not paying, maybe this has already happened and there is little cash value left.

Term is different. Term only pays after the person has died and pays to the beneficiary. So right now as the insured is still alive, TERM HAS NO VALUE*. So to keep the policy and have it be ok for LTC Medicaid what Medicaid does is it will require that the policy beneficiary’s be changed to become the State Medicaid program with the existing first place beneficiaries all becoming secondary. Comprende? After death, the State files for the life insurance payout. ONLY if there is still $ after the LTC Medicaid is repaid, do the other beneficiaries get $.

GUL policy’s can go either way. Can be hard to decipher. Tends to be contacting HR of the employer or retirement benefits provider to find out how the GUL was set up. If the GUL still has perfumes due and is having the employer pay the premiums or they do a match, paperwork could get involved.

The change of beneficiary on life insurance is easy peasy standard stuff. Your States Dept of Insurance and its Insurance Commissioners office may even have a FAQ on this forms.

The rub for POA and families if there are still premiums due, is they may not want to pay the premiums as it’s of likely no benefit for them if they are secondary beneficiary’s as the State more than likely will get all the $ pay out.

* a mistake often made is the applicant or POA puts down the Term policy face value $ amount as an asset. It will throw the application off for processing as looks like they have more $$$ then they actually do. Term has NO VALUE TILL DEATH. But Term value will make a difference as to what Medicaid will require the applicant to do. My understanding is Term that’s under 10K-15K or so, tends to be ok as is with no change to beneficiary as viewed as $ for funeral & burial. But a Term that pays way more $, will more than likely need to get that beneficiary change done.
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Reply to igloo572
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Possibly. Is there an ongoing premium or is is prepaid? It could be used for funeral costs so depending on the premium, it might still be a good idea to keep it in force. Does it have any cash value? Overall, it would be best to keep it in force and make you and your siblings the beneficiaries rather than her estate to avoid the Medicaid lien upon her death. Then you can pay for her cremation or funeral.
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Reply to thomasbulman
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After reading one of the replies,
I think Medicaid will take the policy so there should be nothing to do. Im hoping this will be the final document for her application.
Thanks
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Reply to kenmtb
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Does it have a cashout feature? If not, Medicaid may need to become beneficiary. With cashout, you can put it towards a Medicaid funeral trust. I would talk to a Medicaid caseworker and ask how the policy should be handled.
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Reply to JoAnn29
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kenmtb Feb 12, 2026
There is a net death benefit and a cash value. Both around $2600. Her late husband and estate are listed as beneficiaries but the value is $0. The policy is from 1960 and is paid up. There was a dividend of $20 for last year. I did not see a reference to cash out value. It would be nice to he able to cover final expenses.
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I assume you're referring to a life insurance policy?
She should contact the company which issued the policy to see about changing the beneficiary. Or there may be a cash-out amount if this helps her.
I think it's the cash value which Medicaid considers as an asset.

If the value of the policy is preventing her from getting Medicaid benefits, or the premiums are too high, then cancel it.
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Reply to CaringWifeAZ
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lealonnie1 Feb 3, 2026
His mother has dementia, he neglected to add
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When my dad applied for Medicaid for my mom, he was required to cash out a whole life insurance policy to help her qualify. He was not allowed to keep it. He spent the money on their mutual expenses, it wasn’t “taken” by the nursing home or Medicaid.
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Reply to Daughterof1930
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I would sit down with a professional and go over the policy to see what is best to do.
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Reply to JustAnon
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Find the actual policy document and read it. It is just possible that there is a payout to someone on Husband’s death. Or that it is possible to change the beneficiary – old policies are a lot cheaper than new ones in old age. Be clear about what you are dealing with before you cancel it.
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