Life insurance and Medicaid eligibility

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To qualify for Medicaid coverage of nursing home stay, your assets do not exceed $ 2,000, if you're single or $ 101,540 if you are married. However, not all resources are "countable" for these purposes. The main exceptions are your home, your car and your personal property.

Another exception is the life insurance you own. The rule states that only the "surrender value" of a life insurance policy and numbers, but only ifThe nominal value of all life insurance policies on your life will be more than $ 1,500. (Cash surrender value is the amount of life insurance is sent when the policy was canceled. In addition, the so-called "cash value." The "value" is what companies are charged to beneficiaries this from you when you dies, provided that the policy was still in force).

So if you have a policy of $ 1,000 with a cash value of $ 800, you can keep, and will not countlimit of $ 2,000 / $ 101.540.

What if you have a long-term policy with a face value of $ 100,000? E 'completely optional, as a long-term policy, by definition, has no monetary value. Of course, you (or another family member) to pay the premium every year to maintain.

What should be done with existing policies? If you have an existing policy and your health is not good, you can choose to keep the policy, rather than cancel. After all, it can not be insurable,and if you keep the policy in force, your family could benefit from the proceeds after your death.

If the total face value exceeding $ 1,500 and countable resources, we use the limit to qualify for Medicaid, would be a good idea to have your children acquire the policy, and raises it in fact (through the payment of annual premiums) . You see, it is not insured or who is the receiver that counts --- it is, who owns the policy.The reasons for this Medicaid rule is that the owner may simply money in politics at any time, and then counts the same as if you've already done. But if the child is the owner, there is no way to cash in or cancel the contract, it would no longer count against you.

Another possibility is to assign one-child policy as a gift. This will be a penalty, so a problem in many cases this is not the best solution. But as part of an overall plan thatother gifts, it might make sense.

Recently, some companies pay only advertised value, non-cancelable, non-cash "life insurance." The idea behind this policy is that there is no cash value, the policy can be deducted if they do not. Are you with a minimum of technique (ie practically all guaranteed to qualify to buy one), and the beneficiary is usually the children.

The problem is that when buying an asset that does not have--- The control can not be undone, can not get your money back, even to change the terms or beneficiaries --- the Medicaid agency may consider this a gift. If the case is that you have not got what you might it was, ie the conversion from cash to a non-countable, so there is no need to make a gift of money. Consequently, I recommend my clients to stay away from this type of product, unless and until it proves to be effective as advertised.

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