New Buisness and Food Stamps/ Disability

[NSRH]

Life insurance is not the reason people will disqualify for government assistance, its the cash value only.

Assigning your policy to a funeral home will circumvent that. However, most policies wont build up enough cash value for years to hit the threshold most states require.

Case workers dont understand the difference sometimes.

I wouldn't necessarily assign it to a child, however. If the client goes into a nursing home the child may be required to cash out the policy and give up the money to the state, depending on each states specific look back law.

 

[jdeasy]

I believe that someone has been given bad info down at the welfare and food stamp office because it happens all the time. And funeral homes and nursing homes will spread the same bad info.

Life insurance is not ever an issue nor is cash value the issue. It's part of it.

The cash value in a life insurance policy is a countable asset towards what the state allows. That includes cash on hand, money in a bank account, any penalty free withdrawals from an annuity or retirement savings account, etc.

Anything that's basically liquid is a countable asset. The state have to allow $1500. Most allow $2000 now and some more than that.

The cash value is only a countable asset to the owner of the policy. It's never the insured unless the insured is the owner. The insured and the beneficiary have no standing in the matter. It's only the owner.

And the countable assets are what the person has that month. If they get a windfall and spend it before the next month, it doesn't count.

They can assign to a funeral home and most states have limits on what's protected. You need to know the limits in your state. If there is one.

If you transfer ownership to a person to avoid it being countable it is subject to a 5 year lookback. So the person is not in the clear for 5 years unless there was no cash value at the time of the ownership transfer.

so, if you are in a state where the limit is $1500 and the person has $300 cash value in their policy and $500 in their checking account and $200 cash on hand and more than $500 in a savings account they will lose their benefits for that month.

Then they do it all again the next month.

Our people usually have no money other than what's in the cash value. So it's rare for it to ever be an issue.

The issue comes from idiots working in those offices that tell them, "you can't be having no cash value life insurance".

 

[rousemark]

The old Huff-Cook/Settlers Life plan was really handy in these cases. The only forfeiture values the policies offered was Extended Term and Reduced Paid Up Insurance. Sine there was no cash out option, they did not interfere in anyway with a person's "gubermit" benefits.

 

[jdeasy]

The old Huff-Cook/Settlers Life plan was really handy in these cases. The only forfeiture values the policies offered was Extended Term and Reduced Paid Up Insurance. Sine there was no cash out option, they did not interfere in anyway with a person's "gubermit" benefits.

Well hell!! Let's back the clock up 50 years and get some of that!!

 

[rousemark]

Well hell!! Let's back the clock up 50 years and get some of that!!

Sounds good to me.

 

[shonceman]

The old Huff-Cook/Settlers Life plan was really handy in these cases. The only forfeiture values the policies offered was Extended Term and Reduced Paid Up Insurance. Sine there was no cash out option, they did not interfere in anyway with a person's "gubermit" benefits.

Some "stipulated premium" policies in Texas never get cash value, though they are considered whole life due to level premium. Occasionally I have a buyer request such a policy to avoid interference with benefits. Yet when it comes time for certification, I sometimes have to get on the phone to educate some caseworker as to why the face amount of a policy is not a countable asset!

 

[WinoBlues]

You don't necessarily need to jump to that. They usually just need educating. Or more importantly, de-educated from what some *** down at the welfare office told them.

What would be a better option?

 

[rousemark]

What would be a better option?

Work with a higher income clientele?