Ohio Admin. Code 5160:1-3- – Medicaid: life insurance

Notes

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(1) “Accelerated life insurance payments” means some or all of the proceeds from the life insurance policy are paid out to the policy owner prior to the death of the insured.

(2) “Beneficiary” means an individual or entity named in the contract to receive the policy proceeds upon the death of the insured.

(3) “Cash surrender value (CSV)” means a form of equity value that the policy acquires over time. The owner of a policy can obtain its CSV only by turning the policy in for cancellation before it matures or the insured dies. A loan against a policy reduces its CSV. The value usually increases with the age of the policy.

(4) “Dividend accumulations” are dividends which accrue in an account that the insurance company controls for the policy owner. The policy owner can access the funds without penalty at any time without affecting the policy’s face value (FV) or CSV. Dividend accumulations cannot be excluded from resources under the life insurance exclusion, even if the policy that pays the accumulations is excluded from resources. Unless they can be excluded under another provision, they are a countable resource.

(5) “Dividend additions” are amounts of insurance purchased with dividends and added to the policy, increasing its death benefit and CSV. The table of CSV’s that comes with a policy does not reflect the added CSV of any dividend additions.

(6) “Dividends”, for the purpose of this rule, means periodically (annually, as a rule), the insurer may pay a share of any surplus company earnings to the policy owner as a dividend. Depending on the life insurance company and type of policy involved, dividends can be applied to premiums due, paid by check to the owner, or by an addition or accumulation to an existing policy.

(7) “Face value” (FV) means the amount of basic death benefit contracted for at the time the policy is purchased. It is the amount to be paid out when the insured dies.

(10) “A life insurance policy” means a contract under which the insurer agrees to pay a specified amount to a designated beneficiary upon the death of the insured.

(11) “Owner” means the individual with the right to change such policy. It is normally the person who pays the premiums.

(12) “Term life insurance” means an insurance policy that provides coverage for a specified period at a guaranteed rate. Usually does not have a CSV. Policy owners have the option of converting some term life policies into universal life or whole life insurance policies.

(13) “Universal life insurance” means an insurance policy that provides insurance over a specified period with greater flexibility on premium payment and potential for higher internal rates of return and builds CSV for policy owners over time.

(14) “Whole life insurance” means an insurance policy that applies part of the premium payments to build CSV for the policy owner.

(C) A life insurance policy is a countable resource to the policy owner for medical assistance purposes if it generates a CSV. Its value as a resource is the amount of the CSV.