The general rule

Medicaid looks at your countable assets — usually capped at $2,000 for singles. Term life insurance is not counted (no cash value). Whole life insurance IS counted, but only the cash value — not the death benefit.

Small policy exemption

Most states exempt whole life policies with a total face value under $1,500 from the asset calculation. A few states extend this to $10,000 or more specifically for burial policies. Ask a licensed agent to check your state.

Irrevocable funeral trusts

In many states, you can convert cash into an irrevocable funeral trust (up to $15,000) that Medicaid does not count. This is a common tool used by seniors approaching Medicaid eligibility.

Guaranteed-issue policies

Small guaranteed-issue final expense policies designed for burial purposes are often treated favorably. A licensed agent can structure coverage to protect both Medicaid eligibility and your funeral funding.