Burial Insurance for Medicare Recipient

Can I Buy Burial Insurance as a Medicaid Recipient?

The requirements of Medicaid eligibility differ by cities and states. However, they all contain stipulations regarding burial insurance and how owning the policy affects eligibility. If you are a Medicaid recipient and consider buying burial insurance, you might be thinking about your eligibility. Note that burial insurance coverage offers absolute protection to your family, and it doesn’t have to interfere with your Medicaid eligibility. But it is not the way it always works.

Let’s delve into the details and determine if you can or cannot buy burial insurance as a Medicaid recipient. But before that, you must understand how Medicaid impacts whole life insurance policies.

Impact of Medicaid on Burial Insurance Policies

Whole life insurance policies or burial policies provide people with coverage for their entire life. They also give death benefits and payouts to the beneficiaries of the policyholder when they pass away. Whole life insurance or burial insurance accumulates cash value. This benefit allows people to credit a loan against their accumulated cash value or cash out the insurance policy.

It is important to remember that cash value policies don’t get an exemption from Medicaid’s asset limit since policyholders can withdraw cash from their existing policy.

Burial insurance policies can get exemption up to a specific face value. Remember that the amount of exemption may vary by state. Depending on the amount of face value of a burial insurance coverage, policyholders may experience Medicaid ineligibility.

Limit of Medicaid Asset and Burial Insurance

Most states of America have a set limit of $1,500 for life insurance face value. However, some states impose a relatively higher face value exemption on whole life insurance policies. For instance, in Florida, policyholders or Medicaid recipients can have an exemption of $2500 on burial insurance, but North Carolina offers a higher limit of up to $10,000. You can check the current limitations on the Medicaid website. 

If your whole life insurance policy’s face value exceeds your assets (as per your state), Medicaid adds this cash value of insurance policy to the non-exempt assets. But, if your policy’s cash value is lower than your exemption limit, Medicaid doesn’t count or exempt the burial insurance policy from the asset limit.

Put simply, if a Medicaid recipient reaches the maximum burial exemption, Medicaid will consider his or her remaining cash value as an asset and will not exempt it. 

In many states, such as Missouri, Medicaid applicants who buy a burial insurance policy can’t have a funeral or final expenses plan. That means they have to choose between Medicaid and burial insurance plans. 

In short, buying a burial insurance plan as a Medicaid applicant depends on the state you live in. It may or may not allow you to have a whole life insurance plan.

Final Thoughts

In a nutshell, buying a burial insurance plan requires you to study your option with due diligence, especially if you are a Medicaid recipient. If you find it hard to understand, seek assistance from licensed representatives from Senior Life Services to know your best options.