1) Flat Rate Insurance Policy
The customer has a flat rate long-term care insurance policy. It pays $50.00 a day for each day that he is in a nursing facility. The payments are made monthly.
The customer has signed a form that authorizes the insurance company to make the payments directly to the nursing facility. However, he can have the payments sent to himself instead at any time.
The insurance payments are revocably assigned, so they are considered constructively received. The payments are counted as income to the customer, just as if they were sent to him instead of the nursing facility.