Medicaid && Life Settments: What You Need to Know

Posted on July 3rd, 2025

Medicaid & Life Settlements: What You Need to Know

If you’re considering a life settlement and rely on Medicaid, there’s some important info you need to know—without the headache of legal jargon.

How Medicaid Sees Your Assets
Medicaid looks at your countable assets when determining eligibility. A lump-sum life settlement can temporarily (or permanently) increase what you own, which may affect your ability to qualify.

Spend-Down Strategies
Medicaid allows applicants to reduce countable assets to become eligible—a process called “spend-down.” Settlement funds are often best used for medical care, living expenses, or other allowable costs before applying. Done incorrectly, it could delay benefits or even trigger repayment.

Compliance & Scrutiny
State Medicaid agencies review large deposits closely. Timing, documentation, and proper planning are essential to stay compliant. Working with a professional who understands viatical and life settlements in the context of Medicaid can make all the difference.

Smart Practices to Protect Your Benefits

• Use settlement funds primarily for health care and essential living expenses
• Keep detailed records of how funds are used
• Plan your settlement timing around Medicaid applications
• Consult a financial or elder law advisor familiar with the rules

Take Control Today
With the right approach, you can unlock your life insurance, cover urgent needs, and maintain Medicaid eligibility—giving you confidence, control, and peace of mind. Don’t wait—contact Exit Equity Concierge today to explore your options and make your life insurance work for you when you need it most.