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Title 8: Medicaid Page 29 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Types of Non-MAGI-Related Income Revised April 11, 2025 Inheritance Income Inheritance Income (Cont.) Do not count as income inherited items that were a result of the death of a spouse and that were already counted as a resource.

In Iowa, real and personal property passes to the person who inherits it immediately at the time of death and is not dependent on settlement of the estate unless the terms of the will are being contested. Insurance 20 CFR 416.1102  Accelerated Life Insurance Payments Count as income any payments made by a life insurance company or privately owned and operated business that are an early payout of some of the proceeds of a life insurance policy.

Under this arrangement, the life insurance company or private business pays the owner of a life insurance policy money that would ordinarily go to the beneficiary after the owner’s death (e.g., during a terminal illness).

The payments may be in one lump sum or monthly. (Any payments not spent in the month of receipt become a resource in the following month.) 20 CFR 416.1103(e)  Credit Life or Credit Disability Insurance Payments Payments issued to or on behalf of borrowers to cover payments on loans or mortgages in case of death or disability are not considered income.

The payments are made directly to the loan or mortgage company, so the money is not available to the person. Although a payment might be used for food or shelter (for example, when an insurance company makes a mortgage payment), do not count the payment as income.