Document all life insurance in the case record. Enter the insurance company name and policy number. For group policies, also enter the employer's name and address, and beneficiary information, when available.
Disregard the cash value of non-exempt life insurance policies with a total face value of $1,500 or less. For example, if the client has 2 non-exempt insurance policies with a face value of $500 each (total face value $1,000), the cash value is not counted as an asset.
Enter the total face value of all policies owned by the client on Form 552, even if policies are exempt, or the cash value is disregarded due to face value.
If the face value of non-exempt life insurance exceeds $1,500, review the policy to determine the cash value. Apply the cash value to the asset limit. If more than one non-exempt insurance policy is owned, add the face values together. If the total face value exceeds $1,500, apply the cash values of all non-exempt policies to the asset limit. Enter the cash value which is applied to the asset limit in Item 91 code 704 on Form 552.
For each policy reviewed for cash value, record the following information in the record:
- the cash value of the policy;
- the date of the review; and
- the date you expect that the combined cash values plus other assets will exceed the asset limit.
If the policy tables do not show the cash value, ask the client to get the cash value from their insurance agent. If the client cannot get the information, complete and send Life Insurance Review (Form 922) to the insurance company.
A life insurance policy is the property of the insured unless:
- a valid assignment of the contract has been made; or
- an irrevocable beneficiary has been named; or
- the policy application states that someone other than the insured is responsible for paying the premiums, plus proof that the person is currently making the payments; or
- someone other than the insured claims ownership because they have paid the premiums, and provides proof of the premium payments; or
- the insured has given the policy as a gift to another person, agency, or institution.
If the insured has given up ownership of a life insurance policy by any of the above means, the action is a transfer of assets. See PM 07-02-20 to determine if the transfer affects eligibility. The date of the transfer is the date the person who claims ownership began paying premiums.
NOTE: Eligibility is not affected if the policy was exempt at the time of transfer.
If the transfer information is not available by viewing the insurance policy, use Form 922 to get the needed information. Refer any problems to the Bureau of Operations Support in Springfield.