Wouldn’t limiting the policy’s cash value to whatever SSI limit is established effectively reduce the policy’s duration?
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Asked April 27, 2017
There is an income limit for those who qualify for SSI. This includes everything from investments to income you make from a job. Term life insurance will not count against the SSI limit. Final expense insurance will not count against it either. The only thing that will count against you is permanent life insurance.
They key factor in this is the cash value. Does your plan have any kind of cash value? Whole life insurance has cash value. Universal life insurance has cash value. Those who have this have to declare it as income or some kind of dividend.
There are a few ways to avoid this issue. You can have someone else named as the primary holder on the insurance. This way you can still draw from the cash value without it affecting anything.
The person you choose has to have some sort of insurable interest on you and your life. This can include your kids. This can include your grandkids. This can include your partner or spouse. A co-worker can be named too. You do have to show proof that your co-worker has the insurable interest. It cannot be just anyone. You can choose a friend, but the same rules apply.
The value you cannot be counted against you once you do this. What happens when you want to borrow against the policy? Can you still do this? Yes, you can. You will need to go through the person you named to do it. They will have to fill out paperwork on your behalf.
The best thing to do is talk to your insurance company about not having the cash value count against your SSI. This is the primary option. There may be others to consider. Only your insurance company can tell you for sure. Get in touch with them now.
Answered May 1, 2017 by GWGLife