Nursing Home
- Thread starter dobi
- Start date
- 16,880
No. If a person is in a nursing home on Medicaid they can not have any assets over $2,000 in most states. Cash value life insurance counts as an asset. The nursing home never "takes" your policy but it MAY disqualify the person for their Medicaid qualification. The result will be that the person has to cash surrender the policy or assign ownership of it to a funeral home. If the funeral home owns the policy they will have the dividends buy additional paid up insurance.
Arthur Rudnick
Guru
- 1,652
previously posted by Newby
I'm not sure if that 100% correct.
Agreed that the cash value is considered an asset and if the policy is surrendered, that cash value is subject to Medicaid spend-down. However, wouldn't assigning the ownership of the policy to the funeral home (or any other party) constitute an illegal transfer of countable assets and be subject to the look-back period?
I'm not sure if that 100% correct.
Agreed that the cash value is considered an asset and if the policy is surrendered, that cash value is subject to Medicaid spend-down. However, wouldn't assigning the ownership of the policy to the funeral home (or any other party) constitute an illegal transfer of countable assets and be subject to the look-back period?
- Thread starter
- #4
so if they have a nice size policy and are receiving any kind of dividends then it is subject to be used by the nursing facility as income from that individual am I understanding this correctly? One of their alternatives is to assign ownership to a funeral home? So any dividends that were to be received would then go to the funeral home? I don't know if I like that answer! What about the beneficiaries? Since the ownership changed, then the beneficiaries would change and the only thing that would be constant would be the person that is being insured. Right?
Arthur Rudnick
Guru
- 1,652
If the policy has a death benefit of $100,000 (for example) why would it be assigned to the funeral home or any other party without an insurable interest?
The dividends or interest is considered countable income. That income would be used to determine their Medicaid Eligibility. The cash value is a countable asset and would have to be spent-down to the State's Medicaid requirements prior to being approved for Medicaid.
Dobi, the nursing home doesn't "take" income. The nursing home sends a bill to the patient each month and it's the patient's responsibility to pay that bill. The patient pays each month until they run out of money. At that time he/she can apply for Medicaid. Medicaid rules & regulations, as it applies to income and assets must be followed.
The dividends or interest is considered countable income. That income would be used to determine their Medicaid Eligibility. The cash value is a countable asset and would have to be spent-down to the State's Medicaid requirements prior to being approved for Medicaid.
Dobi, the nursing home doesn't "take" income. The nursing home sends a bill to the patient each month and it's the patient's responsibility to pay that bill. The patient pays each month until they run out of money. At that time he/she can apply for Medicaid. Medicaid rules & regulations, as it applies to income and assets must be followed.
- 24,967
No. The ownership goes to the FH. No more dividends to the insured. The FH gets the cost of the funeral (goods and services) and SS gets the balance of the policy.
Some companies will not allow changing the div option to paid up additions without underwriting. So left on deposit my be the only option.
Last edited:
AgentWillN
Expert
- 99
Perhaps put that money into a Single Premium Life Insurance policy then...
Arthur Rudnick
Guru
- 1,652
previously posted by WinoBlues
First of all, if a WL policy is earning dividends, those dividends are usually left in the policy for additional paid-up insurance. So, the chances are the policyholder would not physically receive those dividends. However, if there's a Medicaid situation involved, those dividends are now considered as countable income and would have to be spent-down towards the cost of care.
second point:
In the case of making the FH an owner. Why would you do that? If anything, you would make the FH a beneficiary. And, you would leave the FH only enough money to cover the cost of the funeral. If the policy has a $100,000 death benefit and the cost of the funeral is $10,000, the other $90,000 should be left to someone else.
But, we're discussing cash-value and whatever that amount is (obviously less than the death benefit) that amount is considered a countable asset.
The cash value, according to Medicaid, must be spent down prior to Medicaid Qualification, it is not given to Social Security (as you stated) and it's not given to Mediciad either. It's given (in this case to the policyholder) and is considered a countable asset.
I'm not certain who the OP is and what his/her part in this and why the question was generated in the first place?
First of all, if a WL policy is earning dividends, those dividends are usually left in the policy for additional paid-up insurance. So, the chances are the policyholder would not physically receive those dividends. However, if there's a Medicaid situation involved, those dividends are now considered as countable income and would have to be spent-down towards the cost of care.
second point:
In the case of making the FH an owner. Why would you do that? If anything, you would make the FH a beneficiary. And, you would leave the FH only enough money to cover the cost of the funeral. If the policy has a $100,000 death benefit and the cost of the funeral is $10,000, the other $90,000 should be left to someone else.
But, we're discussing cash-value and whatever that amount is (obviously less than the death benefit) that amount is considered a countable asset.
The cash value, according to Medicaid, must be spent down prior to Medicaid Qualification, it is not given to Social Security (as you stated) and it's not given to Mediciad either. It's given (in this case to the policyholder) and is considered a countable asset.
I'm not certain who the OP is and what his/her part in this and why the question was generated in the first place?
- 24,967
The OP asked about Dividends that are already being paid out to the insured not paid up additions.
I made the error of assuming a small FE policy on assigning it to the FH.
I made the error of assuming a small FE policy on assigning it to the FH.
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