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Title 8: Medicaid Page 111 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Specific Non-MAGI-Related Resources Revised July 10, 2026 Insurance (Life) Insurance (Life) (Cont.) At annual reviews, review previous cash surrender values of life insurance. Accept the cash value table when the individual is under the resource limit and the cash surrender value is not questionable. If resource eligibility is questionable obtain verification by obtaining a written statement from the insurance company or by sending 470- 0444 unless the total face value of all policies is $1,500 or less and the last report indicated that the face values will not change. See 6-Appendix for instructions on form 470-0444, Insurance Report. Insurance (VA Term Life) People who are age 70 or older and have National Service Life Insurance (VA) term policies earn cash value when the term policy lapses or is canceled at their request. When the policy lapses or is canceled, the cash value will be used to buy a limited amount of paid-up additional (PUA) insurance. With PUA insurance, the policyholder may:  Receive insurance coverage without paying premiums.  Borrow against the cash value.  Surrender it for cash.  Receive annual dividends that may be used to buy more PUA.

The VA term insurance policies will remain excluded as a resource after the policyholder reaches age 70, as long as the policyholder:  Continues to pay the policy premiums and does not allow the policy to lapse; and  Does not request cancellation of the policy.

If the policy lapses or if the policyholder requests cancellation, how the policy is subsequently treated depends on what the policyholder does with the PUA insurance. If the policyholder:

 Receives insurance coverage without a premium, the cash value of the insurance is countable as a resource the month after the change takes place.