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What you can and can’t keep with Medicaid: Life Insurance

Life insurance is an asset that is looked at by Medicaid when determining eligibility. But not all life insurance policies are the same and so they are not all treated the same way either. So, which type of life insurance policy may I keep? And is there a limit to the value?

In this Elder Law Minute, Wes Coulson, Illinois Elder Law attorney, begins a new series What You Can and Can’t Keep with Medicaid and discusses how different types of life insurance policies are looked at by Medicaid in determining whether or not they may be kept when applying for eligibility.

What you can and can’t keep with Medicaid: Life Insurance

Transcript:

Hi, I’m Wes Coulson and this is your Elder Law Minute. Today’s video is part of our series on the Medicaid rules, specifically what you can and can’t keep consistent with eligibility. Let’s talk about life insurance.

In determining whether you can keep like insurance, what the Medicaid agencies in both Missouri and Illinois are looking for is whether that life insurance policy has cash surrender value. What that means is basically if you call the insurance company and said, “I just want to cash this thing in, I don’t want to wait until I die,” would you get money back? If it doesn’t have cash value, you can keep it.

If it does, then we get a little departure between the rules in Illinois and Missouri. In Illinois, if the face value of the policy, the amount that it says on the face, is $1500 or less, or if you have three $500 ones, it’s the aggregate that’s $1500, you can still keep it. In Missouri, you can keep one policy up to that value or have a prepaid funeral, you’ll want to have a prepaid funeral instead. Other than that, life insurance, unfortunately, is one of the assets that you can’t keep consistent with eligibility. So, it’s going to need to be the subject of planning toward protecting the value to the greatest extent possible. That’s something we can help you with. Thanks so much.

For more information on Medicaid and Asset Preservation, visit these articles:

  • See a Lawyer First: Potential problems can be addressed before a Medicaid application is filed
  • Prepaid Funeral Arrangements: The Benefits of Pre-Planning
  • What’s the Difference Between Estate Planning and Asset Preservation Planning?

“Your Trusted Advisor on the Elder Care Journey”

Dent-Coulson Elder Law is dedicated to providing families in the St. Louis area with their Elder Law needs. Our practice areas include Asset Preservation Planning, Veterans Benefits, Medicaid Eligibility, Alzheimer’s Planning, Special Needs Planning, Estate Planning and more. We understand the financial challenges you may face as you and your loved ones grow older. At Dent-Coulson Elder Law, our clients’ well-being is our number one priority. For immediate help, call (877)995-6876 or Contact Us and we will get in touch as soon as possible.

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774 Sunset Blvd Suite 200
O'Fallon, IL 62269
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MO: (314) 567-9292

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Effingham, IL 62401
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774 Sunset Blvd Suite 200
O'Fallon, IL 62269
IL: (618) 632-7000
MO: (314) 567-9292

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Effingham, IL 62401
(217) 330-5500

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