Can You Transfer a Whole Life Insurance Policy and Still Get Medicaid?

 In Long-Term Care Planning


Can the ownership of a whole life policy be changed to make someone Medicaid eligible prior to the application being submitted?


No, the cash value of the policy is a countable asset and any transfer would cause a period of ineligibility for benefits based on that cash value. However, if there is a significant difference between the policy’s cash value and the death benefit, it can make sense to eliminate the cash value by borrowing against it and spending down the proceeds. Someone will still have to pay the premiums on the policy, but it may be worth the cost in order to reap the benefits upon the death of the insured.

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