Can medicaid force life insurance policies to be cashed in when themoney paid comes from the beneficiary and not the policy holder?

UPDATED: Sep 14, 2011

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Can medicaid force life insurance policies to be cashed in when themoney paid comes from the beneficiary and not the policy holder?

I took over the premium payments when my mother went into a nursing home 10+ years ago paying with my money since life insurance doesn’t qualify as a medical expense. Now Medicaid wants to have her policies cashed in. I am also the named beneficiary on the policies and I will not have the $\money for funeral expenses when the time comes.

Asked on September 14, 2011 under Insurance Law, Utah


M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

You need to speak with an attorney that is an expert in medicaid law and who can look at the specific policy that you are speaking about.  Term life insurance has no cash value and can not be counted for medicaid purposes because it can not be paid until the insured passes away.  Whole life policies, however, do have cash value prior to death of the insured and can be counted fr medicaid purposes.  Who the owner of the policy is has an impact on this issue.  Did you change the ownership to you when you started to take over the payments?  Please get help. This is a very complicated issue.  Good luck to you.

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