Or. Admin. R. 461-145-0320

Current through Register Vol. 63, No. 6, June 1, 2024

Section 461-145-0320 - Life Insurance

(1) Benefits paid on a life insurance policy are counted as unearned income in the month received. Except in the QMB-BAS, QMB-SMB, and QMB-SMF programs, any amount retained into the following month is counted as a resource.

(a) The Department counts benefits as received when the insured individual dies or when the insured individual is eligible for and receives accelerated payments before death, such as when the insured individual has a terminal illness.

(b) When the payment is a lump sum due to the death of the insured individual a deduction is allowed, not to exceed $1,500, for the cost of the deceased individual's last illness and burial if these costs were not otherwise insured.

(2) Burial insurance that generates a cash surrender value is treated in the same manner that this rule treats life insurance.

(3) Burial insurance that does not generate a cash surrender value is treated as follows:

(a) For all programs except OSIP, OSIPM, and QMB-DW, it is excluded.

(b) In the OSIP, OSIPM, and QMB-DW programs, it is considered an irrevocable burial arrangement and treated in accordance with OAR 461-145-0040.

(4) When the ownership or beneficiary of a life insurance policy has been irrevocably assigned and designated for burial, it is treated in accordance with OAR 461-145-0040 and is not counted towards the $1500 life insurance limit.

(5) The value of a life insurance policy is treated as follows:

(a) All term insurance that has no cash surrender value is excluded.

(b) In the QMB-BAS, QMB-SMB, QMB-SMF, REF, REFM, SFPSS, SNAP, TA-DVS, Pre-TANF, and TANF programs, the cash surrender value of the life insurance policy is excluded.

(c) In the OSIP, OSIPM, and QMB-DW programs:

(A) For the purposes of this subsection, the following definitions apply:

(i) "Cash surrender value" means the equity that the policy acquires over time.

(ii) "Dividend" means a payment of surplus company earnings from the insurer.

(iii) "Dividend accumulation" means a dividend left with the insurer to accumulate interest that may be withdrawn without affecting the policy's face value or cash surrender value.

(iv) "Dividend addition" means the amount of insurance purchased with a dividend that increases the policy's death benefit and cash surrender value.

(v) "Face value" means the amount of the death benefit contracted for at the time the policy was purchased and does not include a dividend addition added after purchase of the policy.

(vi) "Viatical settlement" means an agreement allowing a third party to acquire a life insurance policy from a terminally ill individual at an agreed-upon percentage of the life insurance policy's face value.

(B) The cash surrender value of life insurance policies owned by the financial group (see 461-110-0530) is excluded if the total face value of all policies for the insured individual is less than or equal to $1,500. If the total face value of all policies for the insured individual is more than $1,500, the entire cash surrender value are counted as a resource to the owner of the policies. The total face value does not include any dividend addition. A dividend accumulation must count as a resource even if the face value of the policy that generated the dividend accumulation is excluded.

(C) The face value of term life insurance policies excluded under subsection (a) of this section are not counted in determining if the $1,500.00 life insurance exclusion limit is exceeded.

(D) The cash surrender value of a policy acquired through a viatical settlement is excluded.

Or. Admin. R. 461-145-0320

AFS 80-1989, f. 12-21-89, cert. ef. 2-1-90; AFS 12-1991(Temp), f. & cert. ef. 7-1-91; AFS 16-1991, f. 8-27-91, cert. ef. 9-1-91; AFS 8-1992, f. & cert. ef. 4-1-92; AFS 28-1992, f. & cert. ef. 10-1-92; AFS 10-1995, f. 3-30-95, cert. ef. 4-1-95; AFS 21-1995, f. 9-20-95, cert. ef. 10-1-95; AFS 9-1997, f. & cert. ef. 7-1-97; AFS 9-1997, f. & cert. ef. 7-1-97; AFS 5-2002, f. & cert. ef. 4-1-02; SSP 29-2003(Temp), f. 10-31-03, cert. ef. 11-1-03 thru 3-31-04; SSP 6-2004, f. & cert. ef. 4-1-04; SSP 24-2004, f. 12-30-04, cert. ef. 1-1-05; SSP 14-2006, f. 9-29-06, cert. ef. 10-1-06; SSP 7-2007, f. 6-29-07, cert. ef. 7-1-07; SSP 5-2010, f. & cert. ef. 4-1-10; SSP 18-2010, f. & cert. ef. 7-1-10; SSP 35-2015, f. 12-23-15, cert. ef. 1/1/2016; SSP 25-2016(Temp), f. 6-30-16, cert. ef. 7-1-16 thru 12-27-16; SSP 31-2016, f. & cert. ef. 9/1/2016; SSP 14-2017, f. 6-5-17, cert. ef. 7/1/2017; SSP 28-2018, amend filed 09/06/2018, effective 10/1/2018; SSP 21-2020, amend filed 07/08/2020, effective 7/8/2020; SSP 26-2021, amend filed 03/24/2021, effective 4/1/2021; SSP 17-2023, amend filed 06/14/2023, effective 7/1/2023

Statutory/Other Authority: ORS 411.706, 411.816, 412.049, 413.085, 414.619, 411.060, 411.070, 411.083, 411.404, 411.704 & 409.050

Statutes/Other Implemented: ORS 411.706, 411.816, 412.049, 413.085, 414.619, ORS 409.010, 411.060, 411.070, 411.083, 411.404, 411.704 & 414.117