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Title 8: Medicaid Page 109 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Specific Non-MAGI-Related Resources Revised April 11, 2025 Insurance (Life) Insurance (Life) (Cont.) If the face value of the policy increases in other ways, use the adjusted face value. Do not include additional sums payable if the member dies in an accident. The cash surrender value is the amount that the insurance company will pay if the policy is canceled before death (this value usually increases with the age of the policy). The cash surrender value may include dividends and may decrease with loans.
Funds paid as accelerated payments from the policy do not change the value of the resource. These payments, called accelerated death benefits, are counted as income.
1. Mr. X owns two life insurance policies, one with a face value of $750 and the other with a face value of $500. Since the total face value of life insurance is $1,250, the policies are exempt from resource consideration.
2. Mr. Y owns three life insurance policies with face values of $1,000, $750, and $500, totaling $2,250. Mrs. Y owns one life insurance policy with a face value of $1,000.
Mrs. Y’s policy is ignored in the computation because its face value is less than $1,500 per owner. Since Mr. Y’s policies total $2,250, the cash surrender value of each policy must be determined.
3. Mr. and Mrs. Q and their child have life insurance with a face value of $4,000. Mr. Q owns the policy. The cash value is counted towards the resource limit.
Count accumulated dividends that are not used to purchase additional insurance as a resource in the same manner as money in a bank account. Count the accumulated dividends even if the countable face value of the policy is less than $1,500 and the cash value of the life insurance is excluded.
Do not include the face value of dividend additions in determining whether a policy is a countable or excludable resource. If the policy is a countable resource, include the cash surrender value of dividend additions in determining the resource value of the policy.