A. There are two factors determining whether life insurance affects your ability to qualify for Medicaid: your State's status on expansion, and whether your life insurance has cash value.
The Affordable Care Act encourages states to expand Medicaid eligibility. The states that are expanding may no longer have asset based eligibility criteria. If you live in one of these states your life insurance does not matter. The states choosing not to expand may have asset and income criteria. The asset criteria is $2,000 and a cash value life insurance policy may impact eligibility.
Term life insurance does not have cash value and would not be considered an asset. Permanent policies such as universal life and whole life do have cash value and would be considered an asset.