What should I do to get back my SSI benefit because I has life insurance it has cash value?

Because the SSI is designed to help those with limited income or no income the SSI is counting the life policy as resource for income. To receive the benefits it is important to prove that she has no income or no resource income adding to more than 1,500. Look here https://www.ssa.gov/OP_Home/handbook/handbook.21/handbook-2159.html. There may be reasons why cashing it out is not an option for your family, like protecting her family if she passes. Unfortunately, the SSI looks at it as a savings account with money in it.

Transferring or cashing out the policy might be an option depending on her age and risk of her dying. Some Universal life policy are beneficial for those who are uninsurable by Term insurance. What would happen if she cashes it out vs continuing to fund it. Call the insurance policy company to find out.

Per the Social Security Laws in order to qualify she must have an annual resource income of less than 1,500 to qualify. So if she cashes some of it out and leaves the value to less than 1,500 would be better off to qualify, and she might not lose her coverage completely this all depends on what the life insurance company can do for her.

Transferring the policy to yourself and making her the beneficiary can be an option but remember that she would only get the death benefit if you die. If you go this route you might find better way to invest 10,000 dollars than a life policy. Also remember that most whole life insurance if she dies the cash value goes away, meaning her family won’t see the 10,000 if she passes.

In short you need to get her resource down to less than 1,500 to qualify.