Does Medicare Cover Life Insurance?

Medicare has changed a lot since it was first introduced, and some of the terminology and rules can be confusing, particularly because many of us don’t pay much attention to Medicare until the moment of retirement. Many people are unsure about exactly what’s covered by Medicare, and one of the most common questions is whether life insurance is part of Medicare benefits.

Does Medicare cover life insurance?

The short answer is no, but the issue is more complicated than that. To understand how life insurance, death benefits, Social Security, and Medicare work together, you must start with the important information.

What exactly is Medicare?

Medicare is a type of health insurance managed by the federal government and linked to your Social Security number. Throughout your working life, the Social Security administration took significant amounts from your wages in tax, which is then given back to you after retirement, in part, through Medicare insurance.

Medicare has three types of policies. Medicare Part A helps you to pay for hospital stays, home health care, nursing care, and hospice. Part B helps you cover doctor visits, preventive care, and outpatient care. 

Part C also includes help for vision, dental, prescription drugs, and general wellness services. Different Medicare plans are available, so getting Medicare insurance quotes is the best way to find the right one for you. Easy Medicare makes it easy to get quotes and information about Medicare plans through their website. 

How does Medicare interact with Social Security?

Some of the confusion about Medicare and life insurance comes from the connection with Social Security. While Medicare and Social Security are strongly linked, they are not the same thing.

Social Security benefits are about more than just health insurance. After retirement, most people are eligible for monthly income from Social Security in addition to Medicare coverage. After death, Social Security will pay a one-time benefit to the relatives of the deceased. This one-time benefit is much like life insurance, but it’s not managed through Medicare.

Do I need a life insurance policy?

Life insurance policies can be a great legacy. Many people get a policy early in their working life in case something unexpected takes them from their spouse or children, leaving their relatives in a bad financial situation.

For many people, however, the older they get the less useful a life insurance policy is. Savings and investments build strong nest eggs to protect spouses, and children grow up, get jobs, and become financially secure. Your family may no longer need your life insurance policy even though you’re still making regular payments to it.

If I don’t need my life insurance policy anymore, what can I do?

If your family no longer needs your life insurance coverage, or if you need money to cover medical bills, pay off a home, or just to take better advantage of your retirement years, a viatical settlement could be the answer. In a viatical settlement, you can sell a life insurance policy for immediate cash.

American Life Fund can help you understand the right settlement for your needs, and several options are available. It’s possible to sell only a portion of your policy and leave some money for the original beneficiaries. Some settlements are only available for those with terminal illnesses, while other options are available to senior-aged individuals without any serious health issues. 

Medicare does not help with life insurance, but Social Security does provide a one-time death benefit similar to life insurance. This may mean you no longer need your life insurance policy. To learn more, contact the Social Security Administration, look into viatical settlement providers, and stay up-to-date on changes to Medicare so you can choose the policy that works best for you.