if I have a 15000 dollar whole life policy can medicaid be cancelled?
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Asked July 31, 2018
Medicaid does have a $2,000 limit on assets to be eligible for Medicaid. There is usually an exception for policies with a face value of $1,500 or lower. So on the surface, it would seem like cancellation might be possible. However, if the cash value is less than $2,000, this would not happen as such an amount would be allowed under the guidelines. Thus, the answer to the question of Medicaid eligibility when a life insurance policy is involved really turns on the cash value. Less than $2000, you are OK. More than $2000, there may be an issue.
It is important to note that a life insurance policy of $10,000 can usually be gifted to another thus avoiding the issue that way. Or perhaps the policy can be converted to a term policy using the existing cash value. Term insurance is not considered by Medicaid, so this should work to give you the result you seek (no risk of cancellation of Medicaid due to asset ownership.
Answered August 1, 2018 by ronanona