Can I Get Final Expense Insurance if I'm on Medicaid?

Medicaid is a government health insurance program for low-income individuals. Final expense insurance is a private life insurance policy. Having Medicaid does not affect your eligibility for final expense insurance, and having final expense insurance does not affect your Medicaid eligibility — as long as the policy's cash value stays below your state's Medicaid asset limits.

Medicaid Estate Recovery

Many states have Medicaid Estate Recovery Programs (MERP) that can make claims against a deceased Medicaid recipient's estate to recover costs. If your final expense insurance benefit is paid to your estate (rather than a named beneficiary), it could be subject to Medicaid estate recovery. The solution is simple: always name a specific person as beneficiary — not "my estate."

Asset Limits and Cash Value Policies

Most final expense insurance policies are whole life policies that build a small cash value over time. Most states have a Medicaid asset limit of $2,000 for an individual. If your policy's cash value exceeds your state's limit, it could affect your Medicaid eligibility. Term life insurance and guaranteed issue policies typically have no cash value and are Medicaid-safe.

Best Options for Medicaid Recipients

Guaranteed issue final expense policies from carriers like Gerber Life, AIG, and CUNA Mutual are the most straightforward options for Medicaid recipients. These policies have no medical exam, no health questions, and no cash value concerns. Name a family member as beneficiary to avoid estate recovery issues.