Is Cash Value of Life Insurance an Asset?

Q: My mother is 76 yrs old, suffering severely from dementia and in need of nursing home care.

She receives Medicare and Medicaid. Her assets are minimal, (no property in her name since 2001, a 1996 Buick regal in fairly good shape, approx $1000.00 in checking, $800.00 monthly social security check and a $10,000 whole life insurance policy with a $3300.00 cash value).

We are in the process of presenting these items to medicaid to qualify her for nursing home care.

My question is, does she have too many assets, with the primary concern being the cash value insurance policy? This policy is being maintained to take care of her "final arrangements" with no intention of cashing out.

I've been told to consider a loan against the policy to reduce the cash value and keep the policy in force.

Thank you in advance for whatever advice you can offer.

A: I am not sure if they count the cash value of the life insurance policy as an asset. One way to find out for sure is to call the Medicaid office and ask them.

Please let me know what you find out.

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