Are Really Small Life Insurance Policies Non-countable for Medicaid Eligibility?
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Question:
I’m taking a long-term care insurance course. In it there is a discussion of Medicaid asset limits and a list of non-countable assets. It’s reporting that cash value life insurance is a non-countable asset if the face value of all life policies is no more than $1,500. Is that accurate?
Response:
Yes, that’s true. We used to bring this up more with clients, but as the value of such policies has dropped over time with inflation, we see very few existing policies this small. And given what else clients have on their hands when a family member needs to apply for Medicaid, we choose not to burden them with buying such policies to shelter such a small amount, especially when the premiums are likely to be high given the age and health of the nursing home resident. So, yes, these very small life insurance policies are non-countable, but they’re rarely relevant.