My dad and I have placed my 82 YO grandmother in a nursing home. She had Medicare and Medicaid. Her life insurance policy has a cash value of a little over $5000. In order for her Medicaid to kick in and help pay for her care, my dad (the beneficiary) had to sign the policy over to a funeral home and make her final arrangements. We sent all the paperwork the insurance company asked for in to them time and time again only to be given the answer that her POA does not have the authority to sign her policy over to anyone else. If he were trying to cash it in I could understand. He is simply trying to get it out of her name so Medicaid will kick in pay for her care. The funeral home called and spoke with the insurance company. They told the funeral home he could do something, but of course they wouldn't specify what. We have an appointment with the attorney that wrote our POA in the next week. But until then, has anyone ran into this issue? If so, any advice? And maybe if anyone else is going through this situation, it may be a good thing for you to ask your attorney if there is a statute that allows you to make changes to life insurance policies out there. My attorney says there is not and he has been practicing for 40+ years.
I am left wondering about the legality of this. I can see that the only option may be to cash the policy in, then spend down the proceeds by paying for final expenses.
The whole idea of power of attorney is that the POA acts for and on behalf of the person he represents, as though he were the person; the POA gives him identical authority with that person. So I can't guess what their problem is but I'd call them and find out.
This same situation exists with bank accounts. Beneficiaries/POD named on accounts override any will or POA.
Please keep us updated. All of us can understand a decision being made, because understanding and navigating the the Medicaid maze is a nightmare, leading to a problem. There are a lot of very smart folks on this board that will try to help...but remember that any legal actions you take must be discussed with an attorney. Best wishes.
Who is the POA?
Did Medicaid tell you to handle the policy this way? If so, call them and tell them insurance company is giving Dad a hard time. I would get it in writing, like an email, why the insurance company won't allow this.
What you are asking the insurance policy to do it pay out the cash value. The insurance company has no control over the funds once your Dad cashes them out. If the policy is irrevocable, Dad cannot change the beneficiary.
If the policy beneficiary is revocable, then Dad needs to check if the Powers within his POA allow him to change the beneficiary. Depending on how the POA was written, it may or may not be allowed. I know I cannot change any insurance that my mother has. I can renew her car, or house insurance, but I cannot touch her life insurance.