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DEPARTMENT FOR AGING AND REHABILITATIVE SERVICES AUXILIARY GRANT PROGRAM NON-SSI INCOME SOURCES 07/19 CHAPTER I, PAGE 49

41. Life Insurance – Accelerated Payments Accelerated life insurance payments are proceeds paid to a policyholder prior to death. Although accelerated payment plans vary from company to company, all of the plans involve early payout of some or all of the proceeds of the policy. Some companies refer to these types of payments as “living needs” or “accelerated death” payments. 41.1. Resource Value Since accelerated payments can be used to meet food, or shelter needs, the payments are income in the month received and a resource if retained into the following month and not otherwise excludable.

42. Life Insurance Proceeds Unearned Income Life insurance proceeds received as a result of a death are death benefits and are unearned income. Use the section Death Benefits to evaluate the proceeds. See Chapter I – 20. Note: The proceeds are not a converted resource. The proceeds are the payable death benefit, not a return of the cash surrender value. Even though a life insurance policy may have been a resource in the past (i.e., the cash surrender value was a resource), at the time of the insured's death that particular resource ceased to exist.

43. Loan Proceeds Unearned Income/Not Income A loan is a transaction whereby one party advances money to, or on behalf of another party, who promises to repay the lender in full, with or without interest. The loan agreement may be written or oral, and must be enforceable under Virginia law. Proceeds of a loan are the moneys the borrower receives or are the principal payments received by the lender. A loan may be a bona fide loan or not bona fide. Whether the loan is bona fide or not determines if it is unearned income or is not income.