Medicaid Life Settlement
A Medicaid Life Settlement is not a long term care insurance policy, annuity, any form of hybrid life/LTCi policies, or an accelerated death benefit– it is actually converting the life insurance policy for a pre-paid, Long Term Care Benefit Plan that covers the monthly burden of high care costs. The Long Term Care Benefit Plan is a unique financial option for seniors because there are no wait periods, no care limitations, no costs to apply, no requirement to be terminally ill, and there are no premium payments. Policy owners use their legal right to convert an in-force life insurance policy to enroll in the benefit plan and are able to immediately direct payments to cover their senior housing and long term care costs.
Medicaid Life Settlement Provides
- No premium payments
- Most types of in-force life insurance qualify (Term, Universal, Whole, Group, etc.)
- Provides funeral benefit
- All types of senior living and long term care qualify
- Payments made direct to care provider for 'private-pay' care
- The Long Term Care Benefit Plan can be used in combination with a long term care insurance policy, an annuity, a VA Aide & – Attendance recipient, or any other financial vehicle
- The transfer of ownership of life insurance policies conforms to the rigorous regulatory standards that govern life settlements in each state.
- The irrevocable, FDIC insured Benefit Account is held by a nationally chartered bank & trust company and must conform to federal and state banking regulations.
- Because the account is irrevocable and can only be spent on long term care services, the Benefit Plan is administered as a Medicaid qualified spend-down.
Medicaid Qualified Spend Down
A Medicaid Life Settlement is considered a “qualified spend down” of a life insurance policy asset. A life insurance policy is legally recognized as your financial asset and it counts against you when qualifying for Medicaid. If a policy has anything more than a minimal amount of cash value (usually in the range of $2,000) it must be liquidated and that money spent towards the cost of care before the owner can qualify for Medicaid. All Medicaid applications specifically ask if the applicant owns life insurance and full policy details. Failure to disclose and comply is fraud.
But, instead of abandoning your life insurance policy as part of qualifying for Medicaid, you can convert your life insurance policy into a Medicaid Life Settlement to help pay for your long term care. You can still preserve a portion of the death benefit to cover funeral expenses to go to your family.
When you convert your life insurance policy instead of allowing it to lapse or be surrendered you remain private pay much longer and stay in control of of the type and quality of your care. You are simultaneously improving your ability to qualify for medicaid if or when your Medicaid Life Settlement account is depleted.
Q: What About Funeral Expenses?
A: A portion of the conversion is set aside for funeral expenses.
Q: What if Mom/Dad passes away before the conversion funds are exhausted on his/her care?
A: Any remaining balance is paid to the family or named beneficiary as a final lump sum payment.
Which Policies Qualify?
- Universal Life Insurance
- Whole Life Insurance
- Term Life Insurance
- Group Life Insurance
Value Based Solely on Death Benefit
The Medicaid Life Settlement is an option that applies to any form of life insurance, and the value of the conversion is based solely on the death benefit. Cash value is not a factor in determining the conversion value of a life insurance policy into a Medicaid Life Settlement and the policy conversion does not have to be done through your insurance provider.
You can convert any form of valid, in-force life insurance policy into an protected, FDIC insured account that will pay a monthly amount directly to the long term care provider. Once you convert your policy, the Medicaid Life Settlement payments for care begin immediately and you are relieved of any responsibility to pay any more insurance premiums.
Medicaid Life Settlement Qualification
To qualify for a Medicaid Life Settlement, the applicant must be in need of long term care services. The process to qualify involves a thourough review of your medical records conducted by a licensed senior care specialist in a process that is very personal and directed at understanding your need for care. As opposed to a traditional Life Settlement review, this process is much more focused on you and your health versus the market value of your policy.
Many families don’t realize a loved one needs long term care or that they are in fact already acting as a care provider. People in need of long term care are not always obvious and can seem to be living independently when they should actually be receiving homecare or assisted living. Many families also don’t understand long term care or how to pay for it. Most life insurance policy owners don’t realize they have the legal right to sell and convert a policy into a Medicaid Life Settlement.
Many families don’t realize a loved one needs long term care or that they are in fact already acting as a care provider.
Cash value is not a factor in determining the conversion value of a life insurance policy into a Medicaid Life Settlement.
Typical enrollment time can be as little as 30 days. Medicaid Life Settlements are ideal for the senior needing immediate care.