In general, in Wisconsin, a life insurance policy issued after July 1, 1997 and used
to fund a pre-need burial contract is a resource for the first 30 days after it is
issued, since the policyholder has the right to cancel the policy during that time
and recover the premiums paid. If the policy was issued prior to that date, check
the policy to determine any cancellation period. After the cancellation period, the
policy will not be a resource if the following conditions are met:
-
1.
The individual has irrevocably assigned the policy or policy proceeds to a funeral
firm, with the right to name a different funeral firm to receive the proceeds;
-
2.
The individual had the right to change the beneficiary to the insurance policy;
-
3.
The individual has either irrevocably assigned or waved the right to obtain the cash
surrender value of the policy;
-
4.
The individual has submitted to the insurance company the irrevocable assignment of
proceeds and the assignment or waiver of the right to obtain the cash surrender value;
and
-
5.
The individual entered into a valid burial agreement.
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6.
If the life insurance policy is a multi-premium funeral policy (i.e., if the premiums
to fund the policy are paid over time, rather than in a single premium) and the policy
was issued or renewed on or after July 1, 2000, please contact MOS-CRSI/SSI for policy
guidance.
The burial agreement should be considered substantially compliant and therefore,
valid under Wisconsin law if it:
-
a.
Identifies the agent selling the agreement and the funeral establishment with which
they are affiliated;
-
b.
Indicates that the agreement is being funded by a life insurance policy;
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c.
Identifies the funeral establishment that will provide the services;
-
d.
Lists the funeral services and merchandise selected; and
-
e.
Indicates whether prices for funeral merchandise and services are guaranteed.
If each of these conditions are met, the LIFBC is valid under state law and the instructions
in SI 01130.425F through SI 01130.425G should be followed. If any of the conditions are not met, the LIFBC might not be
valid under state law. However, you should submit questionable cases to the Regional
Office, MOS-CRSI/SSI for analysis.
If a funeral home or insurance company wants approval of forms before it markets a
package, obtain as much information as possible about the options for executing the
forms (i.e., will the policy permit assignment to a funeral home, etc.). It is preferable
to obtain packages that have already been marketed, rather than blank forms, because
that reveals relevant information that may be critical to the evaluation, such as
to whom the policy has been assigned (i.e., whether to a funeral provider or other
person or entity), as well as the addresses of the parties, etc. The package can be
submitted to the Regional Office for review at the address shown below.
If an individual submits a life insurance funded contract established prior to July
1, 1997 that does not meet these requirements, the case should be submitted to the
Regional Office to obtain a legal opinion. Mail the LIFBC package to the following
address:
Social Security Administration
Chicago Regional Office
MOS-CRS/SSI
10th Floor
P.O. Box 8280
Chicago, IL 60680-8280
The resource determination must be held pending notification from MOS-CRSI/SSI of
the determination of legality.