Can Medicaid Work With Final Expense?

Can Medicaid Work With Final Expense?

For seniors to remain eligible for Medicaid for long-term use, they must have limited assets. This means cash savings and other funds or assets may disrupt their ability to qualify for Medicaid benefits. But with few assets, how will you pay for your funeral expenses? The answer is final expense insurance. Final expense insurance can help you ensure that your burial needs are taken care of before you pass away. 

Medicaid Asset Limits

In most states, the federal asset limit for Medicaid is $2,000 for any single applicant. Therefore, any Medicaid applicant with more than that amount of assets would be ineligible to sign up for Medicaid benefits. To avoid this asset limit, they can use their funds to purchase an irrevocable funeral trust or final expense insurance. 

What Is An Irrevocable Funeral Trust

An irrevocable funeral trust (IFT) is a fund that you can purchase to ensure that your funeral expenses are paid for. The funds are considered uncountable assets, meaning that you can use them to lower your countable assets before death. This will allow you to maintain your Medicaid benefits if you need them. IFTs do not violate Medicaid’s look-back period, therefore you will not be penalized for creating the trust. The downside of this, though, is that the fund can only be used to pay for funeral costs after you die. Any funds not used on the funeral will likely be given to the state, since they are normally listed as the residual beneficiary for IFTs. 

Final Expense Insurance vs. Irrevocable Funeral Trust

If you want to make sure that your funeral is paid for, but don’t want the funds you have to only be used on your funeral, final expense insurance may be the solution you are looking for. To avoid Medicaid’s asset limit, you can invest in an irrevocable trust life insurance policy. This is a type of final expense insurance policy. With IFTs, Medicaid allows people to save a maximum of $15,000 to be used for funeral expenses, and the amount can be funded with a single premium or through several installments. 

This is unlike a traditional life insurance policy, as in most cases, laws will require you to spend down the entire value of a traditional policy to keep your Medicaid benefits. Medicaid is usually unable to attach itself to irrevocable life policies, therefore you will certainly have the death benefits when you pass. Simply transfer your cash to the irrevocable trust to avoid Medicaid’s spend down requirements. 

Start Shopping For Final Expense Insurance 

If you are a Medicaid recipient looking for a solution to avoid the Medicaid spend-down rules, start shopping for final expense insurance. Final expense insurance can be used to subvert the spend-down rules and ensure that your family has the ability to give you a proper funeral. To learn more about IFTs and final expense insurance, contact Final Expense Direct at 1-877-674-0236. 


Final Expense Direct’s utmost concern is the safety of our clients, their families, and our employees and agents. Our hearts, thoughts, and prayers go out to all that the Coronavirus outbreak has touched and those whose lives have been disrupted. While 98% of our workforce is working remotely, we are here if you need assistance. If you are a client, please contact Customer Support at 800-538-3610, Ext 2, with any questions in regards to your policy. You may also contact us via email at We will continue to monitor this situation and keep you updated.