State Policy
Life Insurance Cash Value Remains Countable Asset Under State Medicaid Eligibility Rules
Life insurance policies with cash surrender value count as resources under Medicaid eligibility determinations in most states, potentially disqualifying applicants whose other assets fall below resource limits. State Medicaid agencies must assess policy values during initial eligibility screening and ongoing estate recovery processes. The treatment varies by state policy, with some states exempting term policies or policies below certain face value thresholds. This affects long-term care applicants and beneficiaries subject to estate recovery, requiring careful asset verification by eligibility workers and estate recovery contractors.
Why it mattersState Medicaid agencies and managed care plans handling long-term services and supports enrollment must verify life insurance holdings to prevent erroneous eligibility determinations and ensure compliance with asset transfer rules.