LIFE INSURANCE

A. Life insurance policies owned by the client, client’s spouse, or sponsor(s) that have a cash surrender value available (CSV) must be evaluated for THE original face value at the time of purchase and for the current CSV. B. Term life insurance policies should be reviewed to determine if a CSV exists. C. The county department shall obtain the most recent documentation related to the policies, to include active status, liens or encumbrances, current CSV, and annual dividend statements. D. If the total face value of all life insurance policies owned by a client and his or her spouse is equal to $1,500 or less, the full CSV of all policies is exempt. Sponsor(s) are allowed the same exemption. E. For OAP only, if the total face value of all life insurance policies owned by a client and his or her spouse is equal to more than $1,500 and the CSV of all policies combined is $250,000 or less, then the following applies: 1. If all policies were purchased more than forty-eight (48) months prior to the eligibility determination date, and no further contributions or payments to the policies have been made in the past 48 months, all CSV is exempt; or, 2. If there have been additional monies contributed or payments made to any of the policies within 48 months of the eligibility determination date, those additional monies contributed are counted toward the resource limit; the original cash value amount prior to the 48 month period remains exempt; or, 3. If any of the policies were purchased within the 48 months prior to eligibility determination date, the total CSV is a countable resource; and, 4. Sponsor(s) are allowed the same exemptions. F. For OAP only, if the total face value of all life insurance policies owned by a client and his or her spouse is equal to more than $1,500 and CSV of all policies combined is more than $250,000, then the following applies: 1. If all policies were purchased more than 48 months prior to eligibility determination date, and no further contributions or payments to the policies have been made in the past 48 months, the CSV over $250,000 is countable; the first $250,000 is exempt; or, 2. If there have been additional monies contributed or payments made to any of the policies within 48 months of eligibility determination date, those additional monies contributed are counted toward the resource limit and the CSV over $250,000 is countable; the original cash value amount prior to the 48 month period remains exempt; or, 3. If any of the policies were purchased within the 48 months prior to eligibility determination date, the total CSV is a countable resource; and, 4. Sponsor(s) are allowed the same exemptions. G. The original face value of a policy may be increased because of dividends and reinvestment of dividends. This increased face value shall not be used to determine eligibility. The original face value of the policy shall be used to determine whether the CSV of the policy is exempt. H. Use the following chart to estimate a life insurance policy's CSV if not available from the client, client’s spouse, or sponsor(s): YEARS LIFE INSURANCE ESTIMATED CSV IS THIS POLICY HAS BEEN IN PERCENTAGE OF FACE EFFECT VALUE: 20 OR MORE 60% 15-19 50% 11-14 45% 6-10 30% 4-5 20% 3 10% 2 5% 1 0%