SSI recipient purchasing whole life insurance

[sanourra]

What is the name of your state (only U.S. law)? Oregon

Hi,
My mother was concerned that she would put us (myself and my husband) at financial risk with her burial costs when she dies. She is disabled, but receives only SSI. She has been paying a small amount monthly for a whole life insurance plan, worth $15k when she dies.

She heard from one of her neighbors recently that the government could take that money upon her death, even though I am named the beneficiary (and I am not on any government subsidy). Is there any truth to this?

 

[LdiJ]

What is the name of your state (only U.S. law)? Oregon

Hi,
My mother was concerned that she would put us (myself and my husband) at financial risk with her burial costs when she dies. She is disabled, but receives only SSI. She has been paying a small amount monthly for a whole life insurance plan, worth $15k when she dies.

She heard from one of her neighbors recently that the government could take that money upon her death, even though I am named the beneficiary (and I am not on any government subsidy). Is there any truth to this?

I don't think so. However one possible problem she might have is if she has cash value in the whole life policy that is greater than her allowable asset levels.

 

[OHRoadwarrior]

Once she is deceased it should not be an issue I believe. Where it can create a problem is if a Cash Surrender Value is accrued during the life of the policy. If the policy she has obtained has a cash surrender value, she needs to sign a waiver of the rights to collect it, so as to avoid it becoming an asset.