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MEDICAL SERVICES POLICY MANUAL, SECTION E
E 523 Personal Property Exclusions
5) Contracts or Policies Purchased/Owned by Others- Some contracts or policies are purchased and owned by individuals who are not the applicant/client, but they designate the applicant/client, as beneficiary. These contracts/policies are not considered a resource to the applicant/client; however • Irrevocable contracts/policies owned by other individuals will count against the $1500 exclusion, but • Revocable contracts/policies owned by other individuals will not count in the $1500 exclusion. The above rule does not apply when the purchaser/owner declares the contract/policy was purchased with the applicant/client funds. Ownership can usually be determined by reading the policy/ contract. If the buyer’s name shown is not the applicant/client, then the policy/contract is owned by someone other than the applicant/client. c. Out-of-State Burial Arrangements Some burial arrangements with out-of-state funeral homes may be excluded from resources. If it is verified that the arrangement is irrevocable, the value of the arrangement will not be countable. If questionable, submit a request for an opinion to DAAS. (Re. MS E-501) d. Transfer of Resources Penalty Applicable to Irrevocable Burial Funds RULE FOR APPLICATIONS APPROVED 11/1/95 AND LATER Transfer of Funds to Funeral Homes - If the value of the merchandise and services itemized in a prepaid irrevocable funeral plan is equal to the payment made for the plan or to the face value of the life insurance or annuity irrevocably assigned to the funeral home as payment for the plan, the funeral home now has ownership of the policy and it can be assumed that the individual has purchased a funeral for fair market value. If the value of the itemized merchandise and services is less than the payment, a period of ineligibility will be imposed for an uncompensated transfer. For example, if an individual pays $15,000 to a funeral director but the contract specifies only $5000 worth of merchandise and services, there is a $10,000 uncompensated transfer for which a period of ineligibility will be imposed.