Means Test

What Does Means Test Mean?

A means test evaluates an individual’s financial situation to determine their eligibility for government financial assistance.

Such tests are commonly used in government-sponsored programs like Medicare to assess whether a person qualifies for benefits.

Insuranceopedia Explains Means Test

The primary purpose of a means test is to evaluate whether an individual genuinely requires the assistance they are seeking. Typically, eligibility for government assistance is reserved for those in financially distressed situations. As a result, individuals with substantial wealth or high incomes, even if they lack accumulated wealth, generally do not qualify for certain benefits.

For households that don’t qualify for government programs but still struggle to afford coverage, private insurers have products built around smaller budgets, including low-income car insurance and life insurance for low-income families.