Krause Financial Services is pleased to announce its newest Medicaid Planning product, entitled ”Capital Transfer.“ Capital Transfer is a single premium, guaranteed issue life insurance policy, with no cash value. For Medicaid planning purposes, the Capital Transfer product will be treated as a countable resource with a $0.00 valuation. This Medicaid planning strategy allows an individual to immediately eliminate his or her spend-down amount.
How does Capital Transfer work?
The Capital Transfer product works by converting the face value of the life insurance policy into two components. The first component converts 75% of the face value into 75 equal and monthly payments. The first monthly payment is made 30 days following the date of purchase. The second component is a residual death benefit, and makes up 25% of the face value.
At the death of the insured/Medicaid recipient, the beneficiary(ies) have the option of continuing the monthly payments or converting them to a commuted cash value. The beneficiaries also receive the 25% residual death benefit. All payments made to the beneficiary(ies) are free of estate recovery.
The Capital Transfer product was designed to provide a better economic result than a traditional ”Half-a-Loaf Plan.“
