Common Misconceptions: Is My Life Insurance Protected from Long Term Care in a Nursing Home?
This edition of the Koldin Report E-Newsletter continues a series on common misconceptions about Elder Law, Estate Planning and Medicaid.
In this newsletter we discuss misconceptions about Life Insurance. All prior newsletters are saved on our website. You can read them by clicking here.
Incorrect: My life insurance is safe if I go to a nursing home.
Correct: Medicaid will count the cash value of the life insurance policy as an available resource for Medicaid eligibility purposes.
As discussed in the prior newsletter in this series, Medicare only covers a short-term stay in a nursing home for therapy and rehabilitation. Unless you have long term care insurance, the Medicaid Agency will tell you that you must pay privately towards the cost of nursing home care until your life savings has been spent down to $15,150 (single person in 2018).
The cash value of your life insurance policy is considered part of your life savings. You will be told by the Medicaid Agency that you must cash in your policy and spend it towards the cost of your care.
Therefore, asset protection options that you may want to consider should include taking steps to protect your life insurance policies that have a cash value.
One option to consider is establishing an Irrevocable Trust and transferring ownership of your life insurance policies to your Trust.
For a discussion of Irrevocable Trusts, please see our website by clicking here.
At the Koldin Law Center, P.C., located in East Syracuse, New York, we have over 50 years of experience helping individuals plan for immediate crisis and long term care. Our attorneys are available to discuss your estate planning options. We do not charge a fee for the initial consultation. We welcome your children, family attorney, accountant, and/or financial planner to be present at the initial consultation.
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