Face value of life insurance policies count toward assets or not?

Discussion in 'General Discussion' started by LaurieG, Feb 22, 2010.

  1. LaurieG

    LaurieG Newbie

    Hi -

    My mother's total assets including life insurances are $58,000, but when I deduct the cash surrender value of her life insurances, her total assets are about $45,000. She will be 90 this year. She spends down about $1700 per month.

    I had posted a few days ago about our situation. To make a long story short, the advice we received was to put a large chunk of my mother's money into an annuity. He included cash surrender value of the life insurances in calculating her assets.

    I called another company today for a 15 minute phone consultation. I was told that the life insurances would not have to be calculated into the assets.

    Anyone know the VA rules on this?

    Thanks -

    Laurie
     
  2. pattyclarke

    pattyclarke Newbie

    Laurie,

    I am new to the process and don't know the "VA regulations" but everything I've read in my research says do NOT count life insurance policies (because policy holder must be deceased in order to benefit from it.)

    Patty
     
  3. vetadmin

    vetadmin Administrator Staff Member

    Do NOT count their residence or vehicle when estimating net worth.

    Do NOT count a life insurance policy (because the policy holder must be deceased in order to benefit from it).

    DO count CDs, annuities, stocks, bonds, savings, checking, IRAs, Keogh, etc.

    DO count any assets owned by the spouse as well.
     
  4. jpez

    jpez Full Member

    Very concise answer
     
  5. Max

    Max Hero Member

    All good points. Things to keep in mind as well. If mom moves out of her house, VA no longer considers it her residence, so it is net worth. Interest from IRA's is not countable income, but the distributions received from IRA's is. With the numbers you gave me, it would be questionable as to whether or not she qualifies. You might have to spend down her assets for a few months of her care before she can qualify.
     

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