Selling a life insurance policy may affect Medicaid eligibility because Medicaid is a needs-based program with strict asset and income limits.
A life settlement payout is considered an asset and may temporarily push a person over the allowable threshold. This does not prevent someone from selling a policy, but it does require planning. Some seniors choose to consult an elder law attorney or benefits specialist to understand timing, spend-down rules, and allowable uses of funds.
Programs like Medicare and Social Security retirement benefits are not affected because they are not based on income or asset limits.
For seniors receiving assistance like SSI or long-term care support through Medicaid, it is important to review your options carefully so that the payout supports your overall financial goals.
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