Does Medicare Cover Life Insurance?

Medicare Benefits Solutions
Sep 18, 2021

Medicare provides coverage for medically necessary health care services through Part A (hospital insurance) and Part B (medical insurance). Unlike life insurance coverage, Medicare does not offer certain benefit payments to family members for the death of the insured policyholder.

Although you can have Medicare and life insurance in tandem, Medicare is still only health insurance. There are some coverage limitations, but Medicare helps pay for some care for seniors 65 and over, and individuals under the age of 65 with certain disabilities. Life insurance can also provide some financial respite when needing to pay for care.

What Is Life Insurance and Why Do I Need It?

Life insurance is a financial tool meant to provide financial stability if your loved ones need you to be financially responsible for them—especially in the event of your passing. The basic tenet of life insurance is that the premiums will take care of the death benefit.

If you and your family are healthy, you may not need a life insurance policy, but it might not hurt to have a policy. If you suffer a catastrophic injury that leaves you disabled or terminally ill, a life insurance policy can help provide financial stability.

Life insurance is not just for young families. It may provide money for your beneficiaries if you pass away. It may also provide income for your retirement or if you are not eligible to work. You may need life insurance to merge debts or for an investment in your child’s education, or just to cover unexpected expenses.

Understanding Medigap and Long-Term Care

Life insurance policies can help pay for expenses like long-term custodial care, nursing home care, and other specialized help for seniors. They also pay for expenses because of an accident, dismemberment, and critical illness care.

Does Medicare cover life insurance? Medicare Supplement plans, also known as Medigap, can provide additional insurance for people with Original Medicare, and may be able to help pay for nursing homes and approved care. As an alternative to Original Medicare, Medicare Advantage plans may offer respite care, meal delivery, and medical and non-medical transportation services for long-term care. If you are approaching 65 and have concerns about paying for your health care costs during retirement, particularly long-term needs, a Medicare Advantage plan may offer alternative options.

Depending on which insurer you choose to get your life insurance policy from, you have the choice of a term or permanent coverage with benefits that usually range from $5,000 to $50,000. For example, you can choose a term for a lifetime policy and select a specific dollar amount you specify as the ultimate cost.

Life Insurance and Medicare Coverage

Life insurance policies, including long-term care benefits, alleviate the worry of paying for extensive health care costs or pay death benefits if you pass away. Hybrid life insurance products offer long-term care protection if needed, but the death benefit from the policy does not fund care.

If you have purchased life insurance, you may access some death benefits while still alive to pay for care. Although Medicare does not offer this type of death benefit, you might still consider checking into getting life insurance coverage. While most policies provide death benefits usually between $15,000 and $20,000 or more, you can also use the benefits for long-term care.

Home and community services may be accessible via Medicaid waivers and Medicare Advantage plans if you need long-term care. Adult daycare, personal care at home, and respiratory care for specific illnesses may also be available via these programs.

Financial stability is essential for a comfortable retirement. If you’re thinking about getting life insurance, a financial adviser may be able to help you determine the appropriate coverage you require for your circumstances.