Can Nursing Homes Take Your Life Insurance? 
Nursing homes do not take away life insurance . However , IF you are going on Medicaid because you have depleted your other resources to pay for your long term care , your life insurance will be evaluated to see if it is an exempt asset . Only cash value policies are considered eligible assets , and the amount of face value/cash value that is exempt can vary . If your policy is small enough , you may be able to assign it to a funeral home -LRB- a final expense policy is allowed -RRB- . There is also a regulation now allowing some people to keep part of the death benefit , while using the cash value to pay for their care . To protect your permanent life insurance policy , you could transfer ownership to someone else , but it must be done before the `` look back '' period of 5 years has passed . You could also put it in a trust designed to keep it out of your estate . If you have permanent life insurance policies , talk to a a financial advisor or attorney to assist you . 