If you’re on Medicaid, it’s essential to know how life insurance could affect your benefits.
Some people mistakenly believe life insurance policies will disqualify them from receiving Medicaid benefits. However, that’s not necessarily the case. Owning a life insurance policy may help protect your Medicaid eligibility — and your loved ones would receive death benefits if something happened to you.
Riskbusters Insurance serves the Tennesee area and can help you understand how life insurance will affect Medicaid eligibility.
How Medicaid Works with Life Insurance
Medicaid is a government health insurance program that offers coverage to low-income families and individuals. To qualify for benefits, applicants must meet specific financial criteria. For example, applicants must have an income below a certain level and not have more than a certain amount of assets.
One common question that people have is whether or not life insurance will affect their Medicaid eligibility. The answer to this question is no; life insurance won’t affect Medicaid benefits. This is because life insurance is considered an asset only if it has a cash value. Term life insurance and small whole life policies are considered contracts of pure protection and are not counted as assets. This means they won’t affect your eligibility.
However, if you have a more comprehensive policy and the cash surrender value exceeds the allowable amount, it will be counted as an asset and could affect your Medicaid eligibility. The asset limit in Tennessee is $2,000 in cash or non-exempt assets. Therefore, if your cash surrender value is less than the $2,000 limit, you’ll still be eligible.
Contact Us Today
To get life insurance coverage in Tennessee, call Riskbusters Insurance. Our agents can help you choose the right type of insurance for your situation and explain how it could affect your Medicaid benefits.