Is Life Insurance exempt under Medicaid?

A common and confusing issue when determining eligibility for Medicaid in Connecticut, is the exemption or lack thereof of Life Insurance.

The rules are as follows:

  • Term life insurance of any amount is exempt when determining eligibility for Medicaid long-term care services
  • Permanent life insurance (e.g. whole life, universal life, etc.) is only exempt when the "face value" of all policies is no more than $1,500. Put another way, the cash surrender value is considered available and not exempt if the face value of all such policies is more than $1,500. When calculating the total face value of the policies the Department of Social Services will not count irrevocable burial funds. Note: the face value is not necessarily equal to the cash surrender value.

Confused yet? It is totally understandable if you are, because these rules are pretty confusing. If you need assistance determining whether or not your property is exempt, you should contact a qualified elder law attorney. If you would like more information about elder law, or our firm, feel free to visit our website by clicking here.