WAG 07-02-07-a Irrevocable Assignment of Life Insurance Policy to a Funeral Home to Fund an Irrevocable Prepaid Burial Contract

PM 07-02-07-a

New language added to the policy manual.  Steps for a Caseworker:

  • Confirm the life insurance policy was irrevocably assigned to funeral home to fund an irrevocable prepaid burial contract.
  • Confirm receipt of completed and signed HFS 3195 form.
  • Review life insurance policy:
    • Ensure life insurance policy details correspond with what is reported on form 3195.
  • Ensure the life insurance policy and HFS 3195 form is uploaded to the ECR.
  • Add the life insurance policy(s) records in IES.
    • Add detailed case comments including the following:
      • The received HFS 3195 form,
      • The irrevocable assignment of the life insurance policy,
      • Cash value,
      • Face value,
      • Name of the funeral home,
      • Date HFS 3195 form was received and date the policy was assigned.

Assignment of Multiple Life Insurance Policies

  • Review all monetary values of the life insurance policies.
    •  Ensure all the policies are needed to fund the pre-paid burial contract.
      • If all the polices are needed; follow the steps above to ensure accuracy.
      • If all the policies are not needed:
        • Only exempt the policies necessary to fund the prepaid burial contract.
        • Any policy not needed to fund the prepaid burial contract should be reviewed. Unnecessary life insurance policies require a separate determination. Refer to PM 07-02-07: Life Insurance for additional guidance.
  • Example: Prepaid burial contract equals $12,000. Customer has three total life insurance policies; one $10,000 life insurance policy, one $5,000 life insurance policy and another $4,000 life insurance policy.
    • Only the $10,000 and $4,000 policies are needed and are exempt.
    • Although, the two combined life insurance policies exceed the prepaid burial contract total amount, this is still allowable.
    • The $5,000 policy must be considered as an available resource and reviewed to determine if it is a countable or exempt life insurance policy.
    • Each life insurance policy must have a separate record added in IES.

Record all Life Insurance Policies in IES

Add a life insurance resource record. Refer to the Life Insurance Policy Resource Wizard for additional instructions.

  • Add all known details of the life insurance on the life insurance details page.
  • Select "Yes" to "has the life insurance been transferred?".
  • Select "No" to "is the resource assessable?".
  • Complete the life insurance transfer page.
    • The transfer date is the date the HFS form 3195 is signed.
    • The verification is "Transfer documents".
      • It was transferred to the funeral home.  The funeral home should be entered in the "Transferred to" section.
    • Enter the face value in the "Fair Market Value" field.
    • Enter the same value in "Amount received" as what was entered in the "Fair Market Value" field.