Nursing Home Demands To Be Life Insurance Beneficiary

[mflory]

My mother is in a nursing home and we are in the process of putting her on Medicaid. The nursing home says that we have to sign over the policy to them. It's only 4200 and was purchased for her cremation. Do we have to sign it over?

[Betty3]

My mother is in a nursing home and we are in the process of putting her on Medicaid. The nursing home says that we have to sign over the policy to them. It's only 4200 and was purchased for her cremation. Do we have to sign it over?

I worked at a life ins. co. & this is what I know from the co. I worked for. A "medical provider" (ie hosp., nursing home) is "guaranteed" some payment against the patient's indebtedness before Medicaid is authorized - it's usually just the life ins. policy's cash value (if any). The original owner would continue to pay the premiums & the original beneficiary named would get the policy proceeds at the death of the insured minus the cash value which would have been assigned over to the medical provider by the owner. I'm not saying it can't be required that the whole policy be assigned over to the nursing home (instead of just the cash value) but I hadn't seen one.

I would suggest though that you talk to an attorney in your area regarding this situation. (or you might talk to someone at the Medicaid office & see what they say)

add info: As you know, I'm sure, when deciding whether to grant your mother Medicaid, they look at her income & assets including life insurance. They usually just consider the current cash value (if any) of the life ins.