M E M O R A N D U M

IM-34  04/15/98  LIFE INSURANCE ASSIGNMENTS TO FUND BURIAL PLANS


SUBJECT:
LIFE INSURANCE ASSIGNMENTS TO FUND BURIAL PLANS
 
DISCUSSION:
When life insurance is irrevocably assigned to partially or totally fund a revocable or irrevocable preneed burial contract, we do not consider the cash surrender value (CSV) of the life insurance as an available resource.  We consider the life insurance CSV unavailable effective the month the claimant signed the documents to fund a preneed burial with life insurance.  Under current policy,  the life insurance company must acknowledge such assignments.  Even though we use the claimant's signature date as the date the CSV is considered unavailable, waiting for the life insurance company's acknowledgment delays approving applications.

Effective immediately verification from the funeral home that there is a valid preneed burial contract between the funeral home and the claimant

AND
that funding of the contract was made by the assignment of the claimant's life insurance policy is sufficient documentation that the CSV is not available to the claimant.  We will continue to use the date the claimant signs the documents to fund a preneed burial with life insurance as the date CSV is unavailable.
 
NECESSARY ACTION:
  • Review this memorandum with all appropriate staff.

    •  
  • Consider the CSV unavailable when verification is received from a funeral home that the insurance policy was assigned to fund a preneed burial.
ET/AM
Distribution #6
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