Considering this number, you may be wondering how you\u2019ll pay for it all \u2013 and if you\u2019ll have to hand over your life insurance benefits to cover the costs. Here\u2019s what you need to know about nursing homes and life insurance.<\/p>\n
Frequently asked questions<\/h2>\n\n- Can a nursing home take your life insurance benefits?<\/li>\n
- Can my life insurance policy help pay for a nursing home?<\/li>\n
- Can Medicaid or Medicare take your life insurance to cover your nursing home costs?<\/li>\n
- Can Medicaid claim your life insurance proceeds?<\/li>\n
- Can the government take your life insurance payout after you die?<\/li>\n
- Can Medicaid take your life insurance payout after you die?<\/li>\n
- Should I assign the benefits of my life insurance policy to a funeral home?<\/li>\n<\/ul>\n
Can a nursing home take your life insurance benefits?<\/h2>\n
No, a nursing home can\u2019t take your life insurance benefits. When you die, your life insurance payout will still go to the beneficiary named on your policy. A nursing home will not typically have a claim to assets such as retirement accounts, public benefits, or life insurance policies.<\/p>\n
This does get tricky if you don\u2019t have a beneficiary listed on your policy, though. In that case, the payout will go to your estate once you die. Debt collectors \u2013 like a nursing home \u2013 may be able to make a claim that you owed them money, and your payout could go toward paying off those debts (these laws vary depending on the state). All the more reason to make sure your beneficiaries are up to date<\/a>.<\/p>\n![\"\"](\"https:\/\/fidelitylife-assets.thisismess.io\/uploads\/2020\/04\/16f5faa6-fla_nursinghomeli_r2-01.png\")
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Can your life insurance policy help pay for a nursing home?<\/h2>\n
Some life insurance policies allow you to access your funds early if you have a terminal illness rider<\/a>, also known as an accelerated death benefit. This rider allows you to access part of your payout while you\u2019re still alive if you\u2019ve been diagnosed with a serious or terminal condition. You can use those funds for whatever you need, like covering the cost of a nursing home or assisted living facility. The rest of your death benefit will go to your beneficiaries once you die.<\/p>\nCan Medicaid or Medicare take my life insurance to cover my nursing home costs?<\/strong><\/h2>\nUnfortunately, Medicare isn\u2019t usually an option when paying for a nursing home since it currently doesn\u2019t cover long-term care costs, including care at home, in assisted living, or in nursing home settings. Medicaid benefits can cover nursing home care, but you\u2019ll need to meet certain income and resource limits to qualify. Any life insurance you own can affect whether or not you\u2019re eligible.<\/p>\n
The Medicaid program covers 72.5 million Americans today,<\/a> including children, pregnant women, parents, seniors, and people with disabilities. If you’re older than 65, most states use the rules for Supplemental Security Income (SSI), another federal and state-based benefits program, to determine if you\u2019re eligible.<\/p>\nSSI rules<\/a> state that you can have up to $2,000 in resources, and any income you receive impacts your benefits amount. Certain resources are exempt when considering your eligibility and determining your sources, including life insurance policies up to $1,500<\/a>. Life insurance policies larger than $1,500 could count toward your resources and affect your eligibility.<\/p>\n![\"\"](\"https:\/\/fidelitylife-assets.thisismess.io\/uploads\/2020\/04\/01152326-fla_nursinghomeli_r2-02.png\")
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Can Medicaid claim your life insurance proceeds?<\/h2>\n
Medicaid won\u2019t take your policy from you, but owning life insurance over a certain amount could mean you\u2019re ineligible for full or partial benefits.<\/p>\n
If you have a permanent life insurance policy<\/a> that has built up cash value, that policy typically counts against your Medicaid eligibility<\/a> if it\u2019s worth over a certain amount. For states that follow SSI rules, that amount is $1,500.<\/p>\nMedicaid looks at the type of life insurance that you own to determine if it\u2019s part of your resources. Here\u2019s how it looks at different types of policies:<\/p>\n
\n- Term life:<\/b> Only have a term life policy? It won\u2019t count against your Medicaid eligibility since these plans don\u2019t build up cash value. Term life is not considered an asset.<\/li>\n
- Permanent life:<\/b> Medicaid looks at the face value (amount of the death benefit) and cash value (the amount you can borrow from the policy now) of permanent life policies. Any permanent policy above the state\u2019s resource limit, including final expense insurance<\/a>, can count against your eligibility.<\/li>\n<\/ul>\n
Can a nursing home take your life insurance benefits?<\/h2>\n
No, a nursing home can\u2019t take your life insurance benefits. When you die, your life insurance payout will still go to the beneficiary named on your policy. A nursing home will not typically have a claim to assets such as retirement accounts, public benefits, or life insurance policies.<\/p>\n
This does get tricky if you don\u2019t have a beneficiary listed on your policy, though. In that case, the payout will go to your estate once you die. Debt collectors \u2013 like a nursing home \u2013 may be able to make a claim that you owed them money, and your payout could go toward paying off those debts (these laws vary depending on the state). All the more reason to make sure your beneficiaries are up to date<\/a>.<\/p>\n Some life insurance policies allow you to access your funds early if you have a terminal illness rider<\/a>, also known as an accelerated death benefit. This rider allows you to access part of your payout while you\u2019re still alive if you\u2019ve been diagnosed with a serious or terminal condition. You can use those funds for whatever you need, like covering the cost of a nursing home or assisted living facility. The rest of your death benefit will go to your beneficiaries once you die.<\/p>\n Unfortunately, Medicare isn\u2019t usually an option when paying for a nursing home since it currently doesn\u2019t cover long-term care costs, including care at home, in assisted living, or in nursing home settings. Medicaid benefits can cover nursing home care, but you\u2019ll need to meet certain income and resource limits to qualify. Any life insurance you own can affect whether or not you\u2019re eligible.<\/p>\n The Medicaid program covers 72.5 million Americans today,<\/a> including children, pregnant women, parents, seniors, and people with disabilities. If you’re older than 65, most states use the rules for Supplemental Security Income (SSI), another federal and state-based benefits program, to determine if you\u2019re eligible.<\/p>\n SSI rules<\/a> state that you can have up to $2,000 in resources, and any income you receive impacts your benefits amount. Certain resources are exempt when considering your eligibility and determining your sources, including life insurance policies up to $1,500<\/a>. Life insurance policies larger than $1,500 could count toward your resources and affect your eligibility.<\/p>\n Medicaid won\u2019t take your policy from you, but owning life insurance over a certain amount could mean you\u2019re ineligible for full or partial benefits.<\/p>\n If you have a permanent life insurance policy<\/a> that has built up cash value, that policy typically counts against your Medicaid eligibility<\/a> if it\u2019s worth over a certain amount. For states that follow SSI rules, that amount is $1,500.<\/p>\n Medicaid looks at the type of life insurance that you own to determine if it\u2019s part of your resources. Here\u2019s how it looks at different types of policies:<\/p>\n<\/p>\nCan your life insurance policy help pay for a nursing home?<\/h2>\n
Can Medicaid or Medicare take my life insurance to cover my nursing home costs?<\/strong><\/h2>\n
<\/p>\nCan Medicaid claim your life insurance proceeds?<\/h2>\n
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