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Title 8: Medicaid Page 100 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Specific Non-MAGI-Related Resources Revised September 13, 2024 Burial Funds
Burial Funds (Cont.) 3. Mrs. H has a $2,000 burial fund that is revocable. She has life insurance with a face value of $800. $700 of the burial fund that can be excluded and the interest earned on this $700 are exempt as income and a resource.
The remaining $1,300 is countable as a resource. The interest on the $1,300 is also counted, subject to policies on infrequent and irregular income.
4. Mrs. P has $1,000 in a savings account that she has designated for burial. She also has a $1,000 face value life insurance policy.
$1,500
- 1,000
$ 500 Maximum exclusion Life insurance Can be excluded for burial
$1,000
- 500
$ 500 Designated burial account Remaining exclusion Countable resource
5. Mr. Q has a $1,600 life insurance policy and a $1,000 irrevocable burial contract. The cash value of the life insurance policy is $1,975. Mr. Q designated the cash surrender value of his life insurance as funds set aside for burial.
$1,500
- 1,000
$ 500 Maximum potential exemption Burial contract Remaining potential exemption
$1,975
- 500
$1,475 Cash surrender value of life insurance Remaining exemption Countable resource
Mr. Q’s worker informs him that he could irrevocably assign the life insurance ownership to the irrevocable burial contract, at which point it would no longer count as a resource.
If the client spends any of the burial fund, count the amount spent as income during the period it was spent.