A life insurance policy is an asset of the policy owner and it counts against them when applying for Medicaid.   But, by converting an existing life insurance policy to a Long Term Care Benefit plan, the owner is spending down the asset towards their cost of care in a Medicaid compliant manner while still preserving a portion of the death benefit for their family.  A Long Term Care Benefit Plan is the conversion of an in-force life insurance policy into an irrevocable, FDIC-insured Benefit Account that makes monthly senior care payments on behalf of the individual receiving care.  This option extends the time a person would remain private pay and delays their entry onto Medicaid. When a person is private pay, they can choose the form of care they want and remain financially independent.

Assisted Living and Private Duty Homecare do not accept Medicaid or Medicare.  Surveys show that people mistakenly think Medicare will cover their long term care needs.  The fact is that Medicare will only cover the first 100 days in a nursing home and most often it is Medicaid that will end up covering care in a nursing home.  If a person goes onto Medicaid it means they have become a ward of the state because they are below the poverty line and they are not able to choose the form or place of care that they want and the person will typically have to share a room.

People prefer to remain private pay and in control of their health care choices.  Converting a life insurance policy into a Long Term Care Benefit Plan is a Medicaid qualified spend-down as it keeps a person private pay and off of Medicaid for as long as possible.