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MAABD MAABD MAABD MAABD MAABD MAABD MAABD MAABD Division of Welfare and Supportive Services E-410 Medical Assistance Manual RESOURCES 24 Sept MTL 04/24 TYPES OF RESOURCES (not all inclusive)

LIFE INSURANCE POLICIES RESOURCE TYPE DESCRIPTION

LIFE INSURANCE POLICIES

1. Personal Property

2. Conditional Exclusion

A life insurance policy is a contract. Its purchaser (the owner) pays premiums to the company that provides the insurance (the insurer). In return, the insurer agrees to pay a specified sum to a designated beneficiary upon the death of the insured (the person on whom, or on whose life, the policy exists).

Face Value (FV) is the amount of basic death benefit contracted for at the time the policy is purchased.

A policy's cash surrender value (CSV) is a form of equity value that it acquires over time. The owner of a policy can obtain its CSV only by turning the policy in for cancellation before it matures or the insured dies. A loan against a policy reduces its CSV.

A life insurance policy is a resource if it has a CSV. Its value as a resource is the amount of the CSV. Life insurance which does not have a cash surrender value (e.g., term life insurance) is excluded from all computations.

Any life insurance policy with a CSV must be evaluated for the FV. If the total FV of the policy or combined FV of multiple policies the individual owns total $1,500 or less, exclude them as a resource. If the total FV of the policy or policies exceeds $1,500, the total CSV for each policy is counted.

Accelerated life insurance payments are proceeds paid to a policyholder PRIOR to death. Because an individual receives proceeds from the policy (not the policy's resource value, which is its cash surrender value), the receipt of an accelerated payment is not treated as a conversion of a resource. Since accelerated payments can be used to meet the individual's needs, the payments are income in the month received and a resource if retained into the following month.

Most accelerated payment plans fall into three basic types, depending on the circumstances which cause or "trigger" the payments to be accelerated. These are the:

● Long–term care model, which allows policy- holders to access their death benefits should they require extended confinement in a care facility or, in some instances, health care services at home;