My uncle is currently in a nursing home.

An elder care lawyer we consulted to help with my uncle's Medicaid application said that my aunt needed to cash out both hers and my uncle's life insurance policies because the govt. needed to know the total amount of their assets.

One of the insurance agents suggested that my Aunt takes out a loan against the policy rather than cash out since she's had it since 1983 and would loose a substantial amount.

I'm wondering if this made sense. Doesn't she have to reimburse the govt. when my Uncle died because she would be getting more money than what she declared as the value today?

Thanks for your help.

quote:

An elder care lawyer we consulted to help with my uncle's Medicaid application said that my aunt needed to cash out both hers and my uncle's life insurance policies because the govt. needed to know the total amount of their assets.

Do you mean in hiding the assets?

Im not quite sure but I had my MIL on Medi-cal (Medicaid's equivalent) for a minute which was done by the Medical Social worker in hospital and I never had to claim or cash in her life insurance policy and they were aware of it.
I think I would consult with another atty before you make a decision also the NH that your uncle is in should have a medical social worker consult with him/her also and see if he/she has any idea's.
Also the state that your in the laws maybe different than others so be careful

That doesn't make sense to me. The cash values of the life insurance can easily be gotten from the insurance company. I don't think they need to be cashed out. Life insurance is intended to be a death benefit. And while it is an asset, I haven't heard about people needing to cancel it.