Woman Denied Medicaid Eligibility After Purchasing Endowment Life Insurance Contract

Mary Lind, a nursing home resident, applied for Medicaid benefits and subsequently spent $92,000 on a “Single Premium Pure Endowment Life Insurance Contract.” Under the contract, Lind received her premium plus dividends on the contract’s maturity date after five year if she were still alive. The state found that the endowment was an available resource and denied Lind Medicaid benefits.

On appeal, the state held that the endowment contract did not constitute life insurance because its terms provided that Lind would receive her premium and dividends during her life. The trail court affirmed and Lind appealed.

In Lind v. Maxwell-Jolly (Cal. Ct. App., No. C061912, July 28, 2011)(unpublished), the California Court of Appeals affirmed the lower courts’ rulings, holding that Lind was not entitled to Medicaid benefits because the endowment contract did not constitute life insurance as it did not provide for a guaranteed death benefit.

See Endowment Life Insurance Contract is Available Asset for Medicaid Eligibility Purposes, Elder Law Answers, Aug. 1, 2011.