Long Term Care Model allows payments if the policyholder requires an – extended stay in a care facility or, in some instances, healthcare services at home. Dread Disease or Catastrophic Illness Model allows payments if the – policyholder suffers from a specified covered disease or illness (such as cancer or AIDS). Terminal Illness Model allows payments following the diagnosis of a terminal – illness where death is likely to occur within a specified time frame. Some companies refer to these payments as needs” or death” “living “accelerated payments. Depending on the plan, the receipt of payments may reduce the FV of the policy by the amount of the payments and may reduce the CSV in a proportionate manner. In other cases, a lien may be attached to the policy in the amount of the payments that results in a proportionate reduction in the CSV. Procedure Accelerated Life Insurance Payments: – payments can be used to meet basic needs of food, clothing, and shelter. This is NOT a conversion of a resource because payments are made from the proceeds of the policy rather than from the cash value. The payments should be treated as follows: Month of receipt consider as income – Any money remaining the following month is considered a resource. 302.18 Death Benefits for Last Illness and Burial Expenses (Eff. 10/01/05) Death benefits are received because of another person’s death. Examples include: Life insurance proceeds Social Security benefits Burial benefits from the Railroad or Veterans Administration Inheritances Gifts from relatives, friends, or the community to help with expenses Note: Recurring survivor benefits from a pension or retirement plan or the Social Security Administration are NOT death benefits. Procedure Benefits –Death If Death Benefits Are Not Considered Income, then:
Long Term Care Model – allows payments if the policyholder requires an extended stay in a care facility or, in some instances, healthcare services at home. Dread Disease or Catastrophic Illness Model – allows payments if the policyholder suffers from a specified covered disease or illness (such as cancer or AIDS). Terminal Illness Model – allows payments following the diagnosis of a terminal illness where death is likely to occur within a specified time frame. Some companies refer to these payments as “living needs” or “accelerated death” payments. Depending on the plan, the receipt of payments may reduce the FV of the policy by the amount of the payments and may reduce the CSV in a proportionate manner. In other cases, a lien may be attached to the policy in the amount of the payments that results in a proportionate reduction in the CSV. Procedure – Accelerated Life Insurance Payments: payments can be used to meet basic needs of food, clothing, and shelter. This is NOT a conversion of a resource because payments are made from the proceeds of the policy rather than from the cash value. The payments should be treated as follows: Month of receipt – consider as income Any money remaining the following month is considered a resource. 302.18 Death Benefits for Last Illness and Burial Expenses (Eff. 10/01/05) Death benefits are received because of another person’s death. Examples include: Life insurance proceeds Social Security benefits Burial benefits from the Railroad or Veterans Administration Inheritances Gifts from relatives, friends, or the community to help with expenses Note: Recurring survivor benefits from a pension or retirement plan or the Social Security Administration are NOT death benefits. Procedure –Death Benefits If Death Benefits Are Not Considered Income, then: