Life Insurance(1)

michelle897

Hi! My mother has early onset dementia, and she neglected paying a lot of her bills when her symptoms first started a few years ago. This included her life insurance. She previously had a term policy. I had tried to reinstate it (after she had been diagnosed). But, when they saw "dementia" on the medical form, they would not take her back, even though the illness is the reason she neglected paying it! 

We are now preparing to place her in a facility and prepare to apply for Medicaid in the next year or two. It is my understanding, with guaranteed whole life insurance policies, Medicaid would reimburse themselves following the person's death, and the family would not receive any of it. Are guarenteed modified whole life insurance policies the same way? It would be nice to have some form of life insurance that Medicaid won't take, even just to help with the burial costs down the road.

 My siblings and I are young and are still trying to get our own lives together, and are way in over our heads with all of this and the crazy expenses that come with it all.

Thanks in advance for any help!

Michelle

Quilting brings calm

I don’t know what happens with life insurance and Medicaid.  However, you are allowed to use her money to pre-pay her funeral now. Doing that will not negatively affect her Medicaid application later.

harshedbuzz

I'm sorry you are facing this with your DM and at such a young age.

QBC is correct, the way to cover final expenses is to pre-plan and pre-pay them before she goes into a facility. These costs are exempted from the 5 Year Look-back.

HB

Michael Ellenbogen

While I don’t think you could do much now I would seek the help and advise of a professional as there is a small chance you may be able to win the case to get her insurance back if you paid all of the outstanding bills. In fact the longer you wait the less of a chance you have.

dayn2nite2

Don't even bother with any kind of life insurance, just do a pre-pay funeral with a funeral home and be done with the issue.  Her money can be used for it under Medicaid guidelines.

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