Medicaid and life insurance (parent, money, payment, mother)

[NoleFanHSV]

So my wife is filling out this form for he mother for long term care. She took out a 10k policy on her mother but her mother is the owner of the policy. It is a whole life but has no cash value. It's only been in place a year. Can we just cancel the policy? My wife is the one paying this policy, even though she is not the policy holder.

Her parents make barely anything. My concern is if we tell Medicaid about the policy and we cancel it after that. Would the policy have to stay in the in force even though her parents can't afford the premiums?

[jencam]

Originally Posted by NoleFanHSV

So my wife is filling out this form for he mother for long term care. She took out a 10k policy on her mother but her mother is the owner of the policy. It is a whole life but has no cash value. It's only been in place a year. Can we just cancel the policy? My wife is the one paying this policy, even though she is not the policy holder.

Her parents make barely anything. My concern is if we tell Medicaid about the policy and we cancel it after that. Would the policy have to stay in the in force even though her parents can't afford the premiums?

I don't think it matters. They can't take LI money anyway.

[Briolat21]

You'd want to just check with Medicaid. Since your wife is the one making payments (is she the one actually being billed? Or is her mother being billed, and your wife is just paying) - that might make the difference.

Could the policy be changed such that your wife were the owner of the policy?

I know medicaid does allow a small life insurance policy to be maintained (enough to provide a simple burial/cremation) - but don't recall the limit. Whether it's $2k or $5K...? But I know they did (when we last looked into medicaid, which was a few years back) allow for that and would allow for the payments to maintain that.

So I'd just check.