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After Dad died in 2012 mum took out a Life ins policy, a *guaranteed* one. Turns out its a Graded Whole Life policy. The death benefit amount is 5k. At the end of each yr there is a cash value (thought it was term policy) this being end of 2nd yr the cash value is $485.
Also in 2012 I applied for any help mum could qualify for, she has MO Healthnet on a spend down. They have asked for the cash value of the policy as well as other life ins questions. The thing is, as she is very sick right now with dementia that seems to be progressing at an extremely rapid, I went ahead and applied for additional help in anticipation of possible nursing home care (ONLY AFTER I hVe exhausted myself caring for her at home).
But this insurance thing has be worried, should I change the policy owner even though medicaid probably knows its current owner?

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Chess - you probably have 2 different issues here:
1 involves Medicaid & 2 doesn't.

My suggestion first is the non Medicaid one. The annual cash value is $ 485, correct? Ask the insurance company if the full $ 485 can be re-invested into the policy. So that each year the $ 485 increases the base line of the policy by that amount. Think of the $ 485 as a dividend that gets reinvested. Often for old insurance policies that are paid up, they produce a dividend (my mom has a term life insurance policy that does this). The dividend which is small like your mom's, then gets reinvested into the policy. So policy increases each year by this amount. The dividend goes in automatically too. No gain. Now yours is a whole life policy, so they may not be able to do this, but ask and get the paperwork to do it once you know it will not be an issue for Medicaid.

If you can do this, it means no actual in your pocket gain. Hopefully not an issue for Medicaid. BTW for my mom's dividend, I do report it and the amount in her annual recertification for Medicaid. The amount is amortized over 12 months, so the amount it increases her income / assets is so small it makes no difference for Medicaid. Like for you 485 is $ 40 a mo. So if Medicaid gives you an issue on all this, you have this line of thinking as an explanation.

My experience with Medicaid, is that you want to already have a solution for whatever ? that could come up. The initial caseworker is pretty minimal in training on financial issues, so their answer tends to be NO unless you already have the problem solved with a bow on it for them to place in mom's file. Understand?

Also you want to make sure just how the beneficiary reads in the policy. If it is not to an individual (like you or another sibling), it could be that the beneficiary of the policy is the estate. If so, that may mean another pile of paperwork after death for MERP compliance as the $$ is an assets of her estate. If it is a NCV policy to the FH directly that scenario is avoided. So carefully read the policy. Good luck too.
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Chess, once she is on Medicaid, there is no money available for her to pay the premiums. They would expect her to cash it in and use the $485 for her care. Ask Medicaid if you could buy the policy from your mother instead for $485 and then pay the premiums yourself. That might be a possibility.
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When you say Hand it over... do you mean literally? I have no problem letting them know the cash value after each year, whatnI do have a problem with is IF they are going to take it each year, then there will be nothing left to bury her or whatever. So we are paying for what every month....
This dang policy was meant to be a term life one!
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NO do not change any ownership of anything. Hand it over.
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