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We just filled out the application for Mom's Medicaid. For life insurance, we claimed her life insurance policy with a death benefit $14,854.67 (cash value of $11,635.55). Only after we mailed in the form did we realize the cash value can't be more than $2,000 to qualify. So, we're expecting that she will be denied. Is there anything we can do now to correct the situation, or do we just need to wait to see if she's denied. And if she is denied, I understand what the various options are to handle the insurance, but can these be done on appeal, or will she need to re-apply?

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The company should provide a chart that shows the cash value for the number of years she has owned the policy. I'd confirm the correct amount. I'd check with an expert on how to spend the funds, if you cash them in, on her.
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Our elder care attorney told us it was not necessary to cash it in as long as we used up most of the cash value on her care, which could be medical costs, caregivers, even to pay off the equity loan on the house. Different states may have different rules. You probably want to keep the life insurance policy active to pay for burial.
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This insurance policy will need to be cashed in. But, you can prepay for funeral expenses which include the flowers, luncheon, stone, etc. You will need to talk to the funeral agent how to handle this. Mine put the money in a trust that accumulated interest. Once this is done, you send the proof to the caseworker in charge of Moms acct.
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