News from Newbritainherald:

While term life insurance policies do not count as assets for Medicaid eligibility, the value of whole life policies (the kind that accumulate cash value) is another story.

Whole life policies have a face value and a cash value. The face value is the amount that the policy pays in the event of death of the insured. The cash value is the amount the policy is worth if the policy holder cashes it in.

If the total of the face value of all of the applicant’s whole life policies is $ 1,500 or more, most states consider the total cash value of all policies a countable asset that affects Medicaid eligibility. Consider this example: John is a widower with two grown children. He has assets of less than $ 900, not counting his whole life insurance policy with a face value of $ 5,000. In Connecticut, his assets fall within Medicaid eligibility guidelines. However, his life insurance policy has a cash value of $ 3,250. Since the face value is higher than $ 1,600, the policy’s cash value is a countable asset. John cannot qualify for Medicaid u……….. continues on Newbritainherald.

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