Does Medicare Cover Life Insurance? 

Life insurance is an important safeguard that can offer financial protection for your loved ones after you pass. Although seniors are living longer than ever these days, the fact is that no one knows when an accident will happen or when an unforeseen health concern will strike. A sudden departure can leave your family struggling to pay bills, and it may impact the long-term future of minor children in your family as well.

Purchasing life insurance is usually done through an independent insurance provider, but some people have life insurance policies through an employer, a credit union account or through some other non-insurance entity. There are two general types of life insurance: term life and whole life. These are similar, but there are some key differences that can make one better than the other depending on your needs.

Term life insurance

Term life insurance is generally the more popular option as it is less expensive. Term life insurance policies cover the policyholder for a specified term or period of time. At the end of the term, the policy is either renewed, dropped or canceled. When it comes to renewing a term life policy, you may need to undergo a medical evaluation and answer interview questions to ascertain your current state of health.

If you pass away during the term of your policy, your beneficiaries will receive the payment based on the conditions of your policy. If you are still living at the end of your term, you nor your beneficiaries receive any payment. This means that a term life policy generally holds little-to-no resale value, and you can’t borrow against the policy’s value in most cases.

Whole life insurance

Whole life insurance tends to be more expensive than term life insurance, but this cost is offset by the fact that the policy remains in effect for the entirety of the policy holder’s life, and it generally can’t be canceled by the insurer. Additionally, a whole life insurance policy accrues interest, so it acts as a tax-deferred savings vehicle as well. You may be able to borrow against the value of a whole life policy.

Does Medicare cover life insurance?

Medicare is used to cover expenses related to medical care. Although you might think that life insurance would be considered a medical expense since it has to do with your life and ultimately your death, the fact is that Medicare does not provide a life insurance benefit. Medicare only covers medical expenses related to preserving your life and improving your health.

Additionally, you aren’t able to pass along any of your Medicare benefits upon your passing. Medicare coverage is provided on an individual basis, and the sharing of benefits is not allowed either. When Medicare recipients pass away, their benefits are halted and any associated Medicare account is closed.

Do Medicare Advantage plans cover life insurance?

Because Medicare Advantage plans offer the same benefits as Original Medicare but with additional options for extra benefits, many retirees and seniors wonder whether a Medicare Advantage plan will provide coverage for life insurance benefits.

Unfortunately, just like with Original Medicare, Medicare Advantage benefits do not cover life insurance either. With this stated, it may be possible that a Medicare Advantage plan provider offers discounts on coverage policies that are available through third-party life insurance companies. Even if this is the case, the life insurance plan itself likely will not be included as a part of your Medicare benefits.