Ohio Administrative Code › Title 5160:1 - Eligibility › Chapter 5160:1-3 - Medicaid for the Aged, Blind, or Disabled (ABD) › Section 5160:1-3-05.12 - Medicaid: life insurance

Current through all regulations passed and filed through July 1, 2024
(A) This rule describes how life insurance
			 policies are treated for purposes of determining medical assistance
			 eligibility.
(B) Definitions of
			 terms contained within life insurance policies.
(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.
(8) "Insured" means the individual whose life
			 is covered by the life insurance policy.
(9) "Insurer" means the company or
			 association which contracts with the owner.
(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.