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Aged, Blind and Disabled Manual Policy Manual Number: 110.050 Section: Financial Eligibility Requirements Chapter: ABD Countable and Excluded Resources

September 1, 2026 Division of TennCare 7 Burial Contracts Resource Type Burial Contracts Legal Authority: Tennessee Code Annotated 62-5-401 through 409

1. Prepaid or Preneed Burial Contracts A prepaid or preneed burial contract is an agreement under which an individual pays in advance for a burial that the seller agrees to furnish upon the death of the individual or another designated individual. Sellers of prepaid burial contracts are individuals and entities in the funeral industry, e.g. funeral homes. Prepaid burial contracts can be funded numerous ways, including cash payment to the funeral home or the purchase of an annuity or life insurance with assignment to the funeral home (See Section b. for additional information about life insurance funded burial contracts). The funeral home is then required by state law to place those funds into a preneed burial trust, or a preneed burial insurance product. Note: Installment payments on a prepaid burial contract are treated as countable funds subject to the burial reserve exclusion, until the contract is paid off in full. Once the contract has been paid in full, apply burial space and funds exclusions as provided below. This applies to contracts under which the buyer is not entitled to the spaces or services listed in the contract until paid in full; and the seller is not obligated to provide spaces or services until the contract is paid in full. a. Revocable Burial Contract The value of a revocable prepaid burial contract is a countable resource. b. Irrevocable Burial Contract The value of an irrevocable prepaid burial contract is an excluded resource, under the following conditions: i. Agreements established prior to 7/1/1981