How to handle insurance proceeds

[rowz]

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

Greetings from the Jersey Shore. This is for/about my Mom.

She had property damage from Sandy which resulted in her old barn being damaged to the point of needing to be demolished.

Her homeoowners insurance has just said that they will be sending her nearly 1000K!!

Whooppee!!


My inquiry is about the money hurting her food stamps and Medicare eligibility.

As this is insurance proceeds [no Fed/State/Local Income tax on the $] are there issues that she needs to be aware of if she does not spend all the $ on replacing the structure.

She has an appt. next week to apply for food stamps.

Is it proper to purchase life insurance? She is 84 in April and does not have ANY ay this time.
This $$ is a god send to her at this point.....she will be able to make needed repairs to the house.

Thanks for the input that you may provide.

 

[anteater]

Her homeoowners insurance has just said that they will be sending her nearly 1000K!!

I would interpret "1000K" as $1 million. That must be some barn!

My inquiry is about the money hurting her food stamps and Medicare eligibility.

Did you mean Medicaid? In context, it does not seem like it. Medicare is an entitlement. It isn't means tested.

Don't really know about food stamps. I don't know if New Jersey has an asset test If there is an asset test and if the insurance proceeds were being used to replace the barn, I would think that there would be an exception. Being used for general expenses? Not sure.

Is it proper to purchase life insurance? She is 84 in April and does not have ANY ay this time.

Not certain what you mean by "proper." Even if she could find a willing insurer, it would be very expensive for an 84 year old. And, if she should need Medicaid assistance, there are very low limits on cash value insurance. Perhaps one of the companies that issue what are called "final expense policies" might issue a policy. Considering the possibility of future Medicaid assistance, an option would be to look at prepaid funeral and burial arrangements.

 

[rowz]

Good morning.

anteater-thank you very much for your detailed reply.

Sigh...its [almost] One-Hundred K.
It was late [for me] and I "stuttered".
Even when I "proofed" before posting I missed that. :-/

Anyway it is a HUGE help for her.

I 'll be surprised if NJ has much f any of a means test. That will be discovered soon.

I had thought about the final expense type policy. I do recall that in one or more of the ads for these advertise the top-end of the age limit is 85.

Many thanks for your time and attention..