Life insurance is one of those overlooked items that often trips up people who have applied to get Medicaid (Title 19) either for nursing home care or home care. That is because life insurance is subject to special rules and in many cases the policy will count as an asset to put someone over the $1,600 limit for Medicaid. This rule does not include term life insurance because it has no cash value.
In Connecticut, the first rule is to add up all policies to see if they total a face value of $1,500 or less. If an applicant has one $1,500 policy and no others, or two $750 policies and no others, they do not count, even if their cash value is much higher, because the total face value of the policies does not exceed $1,500.
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