Having a life insurance policy while on Medicaid is possible, but it may affect your eligibility, depending on the type of policy. Medicaid, aimed at assisting low-income individuals, has strict income and asset limits. The type and value of your life insurance policy can determine whether it counts as an asset and, in turn, whether it impacts your Medicaid eligibility.
Term life insurance does not impact Medicaid because it is not considered an asset, as it does not accumulate cash value. However, whole life insurance builds cash value over time, which the policy owner can access and may be counted as an asset for Medicaid purposes.