Does a cash value life insurance get considered when figuring assets for Medicaid

Q) My parents live in Illinois and my mom needs to apply for Medicaid to go to a nursing home. My father will continue to live in their home. There assets will not be over the threshold. Does a small cash value of a life insurance policy just get considered when figuring their assets or will Medicaid take the cash value amount and then the life insurance policy will be surrendered and no longer in effect.

A) A whole life insurance policy has a cash value and can count as an asset. If your overall cash value puts assets above the Medicaid resource limit, then that could potentially make your mom ineligible for Medicaid. You may consider to make sure that her estate is not the beneficiary of her life insurance policy. The Medicaid program will seek to take money from her estate, and this cannot be conducted if she choose to change the beneficiary of her policy. Therefore, instead of listing her estate as a life insurance beneficiary, she may consider listing an individual or individuals that will receive her life insurance policy proceeds. Remember it’s always best to get legal advise on this issue.