Does the same go for life insurance policies that beneficiary is son or daughter, can they hold her policies?

You have asked a question before and not responded when asked for more info.

Are you talking about Medicaid. If so, Medicaid expects all assets be spent down. The applicant is allowed to have a house and car. All insurance policies not owned by employer has to be cashed in if there is cash value. Money can be used to prepay for a funeral. In my state u are allowed 2k left. If there is a house at time of death, a lean will be put on it so when/If sold they can get the money back spent on the applicants. There is a lot more that goes with Medicaid but I gave you an overview.

Who is actually the owner of the policy(s)? Are you talking about Medicaid spend down?