Can You Get Medicaid If Your Spouse Had Life Insurance?

Life insurance can help lessen the financial burden for loved ones. Unfortunately, if you are a Medicaid recipient and received money from your spouse's life insurance policy, you may risk losing your benefits.

Asset Law

• Medicaid has strict asset restrictions. If covered by Medicaid, you are only allowed up to $2,000 in cash. A payment greater than this amount can result in disqualification. The law states you must report any money received to Medicaid.

Qualifying for Medicaid

• You may be required to spend down the money before you can become eligible for Medicaid coverage again. The money may be given away to other family members or spent on medical bills. You may also consider utilizing asset protection services, such as trusts, before you reapply for coverage. Check the Medicaid laws in your state for the policy on assets and look-back laws.

Making an Investment

• Medicaid does not count certain assets. Your home, vehicle and personal property are excluded from the total assets you can possess while receiving Medicaid coverage. Consider investing the life insurance money in home renovations, purchase furniture or buy a new vehicle.