Can The State Take Life Insurance Money? 
The state does not take away your life insurance or even your cash value . You life insurance will just prevent you from qualifying for state assistance such as Medicaid . Your cash value does n't need to be $ 2,000 or more to be a problem because if you have any money in a savings or checking account or any other countable assets , the combination of all of them can not be over $ 2,000 . You can assign your policy to a funeral home but the secondary beneficiary for money left over after the funeral is paid must run through your estate . Medicaid will usually be the 1st creditor that will get anything that runs through your estate . 