Legal Question in Elder Law in Illinois

Neither. If the face amount, i.e. the death benefit, exceeds $1,500 then policy's cash value is NOT exempt. You didn't mention what the cash value was.

If the cash value is, say, $2,500 then protecting this asset from spenddown means including it in an overall strategy. This is a complex area of the law in which I have a sub-specialty. Make sure the attorney you meet with is experienced with Medicaid planning, not just general estate planning.

All assets will need to be considered, not just the life insurance policy.

You may be able to allocate some or all of these funds to an irrevocable, pre-paid burial contract, and thus avoid some of the required Medicaid spenddown. Feel free to call me if you'd like to discuss this further.