Page 205

MEDICAL SERVICES POLICY MANUAL, SECTION E

E 523 Personal Property Exclusions

2. Life Insurance Policies a. An individual is allowed to own policies with a combined face value of $1500 or less per insured individual without consideration of cash surrender value (CSV). b. Only policies that generate CSV are considered against the $1500 limit. These include Whole Life, Straight Life, Endowment, Limited Payment Life, etc. c. Policies which do not generate CSV are not counted as resources. When the combined face value of policies with CSV owned by the individual is equal to or less than $1500 per insured, there is no resource to be considered. However, the face value of the policies in which the owner is also the insured must be considered in determining excluded burial funds. When the combined face value of policies with CSV owned by the individual exceeds $1500 per insured, the CSV of the policies must be determined and counted as a resource. If the individual provides a written statement that the insurance policies are intended to cover burial expenses, the CSV of such policies in which the owner is also the insured may be designated as a burial fund. Example: Mrs. Lambert, an aged individual, owns four life insurance policies on herself with the following values: $400 FV with $700 CSV; $500 FV with $1000 CSV; $25,000 FV with no CSV generated; and $200 FV with $400 CSV. The $25,000 FV policy is totally excluded from resources as it does not generate CSV. The remaining policies are excluded from resources because they are for the same insured person and the total combined FV ($400 + $500 + $200 = $1100) is less than $1500. However, their face values must be considered in determining excluded burial funds. Example: Mrs. Lambert, from the previous example, also owns three additional life insurance policies on other individuals. In this case, calculate for each insured the total FV of those policies that generate a CSV. If the total FV of the policies owned on each of the other individuals is more than $1500 per insured, count the CSV as a resource to the owner. She owns two policies on her son, Josh, with the following values: $2000 FV with $400 CSV and $500 FV with $25 CSV. The CSV of these life insurance policies ($425) must be counted as a resource to Mrs. Lambert because the total combined FV of Josh’s policies ($2500) are over $1500.