I am a beneficiary of a whole life insurance policy. Can Medical Assistance or Medicaid take the funds? I am in Minnesota.


1 Answer 1


Disclaimer: I am not an attorney but know enough to say that you should speak to an attorney before doing anything, as hiding assets from Medicaid can cause serious problems, even if there was no intent to defraud.

However, from https://www.elderlawanswers.com/can-life-insurance-affect-your-medicaid-eligibility-12421:

If a Medicaid applicant has term life insurance, it doesn’t count as an asset and won't affect Medicaid eligibility because this form of life insurance does not have an accumulated cash value. On the other hand, whole life insurance accumulates a cash value that the owner can access, so it can be counted as an asset.

That said, Medicaid law exempts small whole life insurance policies from the calculation of assets. If the policy's face value is less than $1,500, then it won't count as an asset for Medicaid eligibility purposes. However, if the policy’s face value is more than $1,500, the cash surrender value becomes an available asset.

So it may depend on whether you have access to the funds directly or if you are just the beneficiary on death (meaning whoever set up the policy owns the cash value, not you)

The site also gives some possible solutions, but also warns to speak with an attorney, for the same reasons.

  • Thank you for your response. I have no desire to hide this from the county/state. I called the insurance company and they immediatly sent me a claim form. I was just trying to get information from them. I can't afford an attorney, especially if there if there is no chance to recoup the attorney fees.
    – bleujean
    Oct 24, 2017 at 2:18
  • @bleujean Have you tried to talk to any attorneys? Most will do Pro Bono work free of charge.
    – D Stanley
    Oct 24, 2017 at 13:19
  • I have not contacted one yet but am checking into my Employee Assistance program to see if that will help. I have found out that this is a Universal Life Insurance, not a whole life policy, if that makes a difference.
    – bleujean
    Oct 25, 2017 at 1:21
  • @bleujean That's a great plan - I keep forgetting that many people have that option. As far as Universal life, it's not exactly the same but it does have a cash value so it may still be relevant.
    – D Stanley
    Oct 25, 2017 at 13:25
  • I spoke with an attorney through my EAP. He first told me it should be mine. Then he said he wasn't sure. Then he asked me to let him know when I find out the answer.
    – bleujean
    Oct 26, 2017 at 1:49

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