Life Insurance that you own Is NOT protected…
Many people assume incorrectly that life insurance policies are “safe” from the nursing home – they are not. Insurance policies are treated like any other form of savings or investment.
If the need arises for a person to enter a nursing home, and/or apply for Medical Assistance, cash value life insurance policies owned by the patient are considered as “available assets”.
If you own a life insurance policy(ies) with a cash value in excess of $1,500, you may have to cash in the policy and use the proceeds to pay for your medical care before the County will pick up your medical costs.
If you need Medical Assistance, it makes no difference where your money is invested…life insurance, annuities, IRA’s stocks, bonds, savings accounts, etc. If you own the assets, and if you can make a withdrawal of funds, you generally MUST make a withdrawal, and exhaust your assets before the County will pay your bills.