Medicaid and Living Benefits.

Because of the nature of term, it likely will be much more rare to be inforce than permanent when most people experience a need for care......but definitely a possibility.

I am not aware that medicaid will force a person to file a death benefit claim while they are still alive.

However, years ago I was told by a lawyer that agents & clients shouldn't put the terminal illness access rider on a policy until the insured wanted to use it. The lawyers point was similar to what you are thinking. His point was someone in dire financial straits with creditors, bankruptcy, etc could be forced to file an acceleration of death benefit to get cash to satisfy the creditor or bankruptcy, etc. I have never heard of that actually happening

Here is ACLI actually stating Medicaid can't force claim to be filed but they will count the claim payments as income to be used for care, etcScreenshot_20230215-213507~2.png
Usually not from what I have been told in the past. Usually if you put an irrevocable bene for a policy, it is the entire policy. But maybe carriers will permit a collateral assignment or partial assignment. The question will be if the medicaid application process would allow it to be allowed on larger non burial policies. Many hybrid policies can be hundreds of thousands of death benefit & many times sizeable cash values far exceeding the $2k exempt asset amount or an allowable amount for a pre paid funeral plan, etc

Hopefully someone with more direct experience with recent cases of clients needing to qualify for Medicaid but also having too much life CV in a hybrid policy. I believe only stand alone long term care that have partnership eligibility have any special standing
You can’t just make a funeral home the irrevocable beneficiary for the policy to be exempt from Medicaid. You have to make the funeral home or a funeral trust the OWNER of the policy. And there can not be any secondary beneficiary other than the estate. And as you know Medicaid will receive any monies that run through the estate upon death.