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Week of March 28, 2008 • Previous Question Archive

Ms. Sabella has managed MainStay Balanced Fund since its inception in 1989. She is a Managing Director and has been with NYLIM since 2000. Prior to that, she worked at Towneley Capital Management, Inc. for 22 years. Ms. Sabella is a member of the Financial Planning Association, Financial Women's Association, and the CFA Institute. She holds a B.B.A. from Baruch College, is a Certified Financial Planner, and is a Chartered Retirement Planning Counselor.

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Q: Is single premium life a logical choice for someone who is trying to protect assets, but may need to qualify for Medicaid five years from now? If it is past the five year look-back period, is there generally a Medicaid penalty? Is there a better product for that purpose?

A: New York Life Insurance Company cannot give advice in this area as Federal laws in the past have frowned upon positioning assets to qualify for Medicaid. Medicaid eligibility requirements vary from state to state. General requirements are determined by the federal government, although individual states administer the program. So whether Cash Value Life Insurance is included in the property looked at for Medicaid purpose, depends on individual state law.

Although some states may include a small amount of Cash Value Life Insurance as exempt assets, it is important to consider that these assets could lose their exempt status when a Medicaid recipient dies. The state may claim reimbursement from the decedent's estate for benefits provided.

It is important for consumers to consult with elder-care attorneys regarding the specific Medicaid rules applicable in each state. New York Life does not issue any Medicaid certified policies.

This article is intended to provide general information only and is not intended to provide investment advice or any recommendation to buy, sell or hold securities. The content of this article is not appropriate for the purposes of making a decision to carry out a transaction or trade, nor does it provide any form of advice (investment, tax, legal) amounting to investment advice or make any recommendations regarding particular financial instruments, securities, investments or products. Any information herein has no regard to the specific investment objectives, financial situation, or particular needs of any specific investor, and investments discussed may not be suitable for all investors. Neither NYLIM nor New York life will be liable for any errors or inaccuracies in such content or any actions taken in reliance thereon. As a registered investment advisor, NYLIM may render investment advice for compensation only as permitted under applicable US and state law.

Questions will usually be answered within the next bi-weekly posting of Ask Joan. If a question is particularly involved, or the answer depends on the specific circumstances, it may be possible to give only a very general answer. In these cases, you will be advised to seek more specific advice.

Ask Joan

Q: Is single premium life a logical choice for someone who is trying to protect assets, but may need to qualify for Medicaid five years from now? If it is past the five year look-back period, is there generally a Medicaid penalty? Is there a better product for that purpose?

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