Do not reduce the $6,050 prepaid burial limit on an irrevocable plan by the face value of disregarded non-exempt life insurance. Apply the amount in excess of the $6,050 prepaid burial limit to the client's resource limit.
Example: A person owns the following assets:
Life Insurance with $1,000 face value, $500 cash value,
$10,800 irrevocable prepaid burial plan:
($4,000 designated for burial space), and
$1,000 savings account.
The resource limit is $2,000.
Subtract the $4,000 amount designated for burial space from the $10,800 total ($10,800 - $4,000 = $6,800). From the $6,800 amount subtract the $6,050 irrevocable prepaid burial limit ($6,800 - $6,050 = $750). Apply the $750 remainder to the person's $2,000 resource limit. The person's total countable resources are: $750 prepaid burial plus $1,000 savings account = $1,750.