Will Medicaid Take My Life Insurance? 
No , Medicaid will not take your life insurance . You can have as much Term life insurance as you want , and you can have a final expense policy that will fund your funeral and burial needs . You can also have Whole Life insurance , but if the cash value of your life insurance goes above a certain amount , you may need to adjust your policy when going on Medicaid . Talk to your Health and Human Services Dept to discuss their guidelines and your options if you have a Whole Life insurance policy . 