Applying the $1500 CSV Exemption

 

REQUIREMENT:

An individual is allowed a $1500 exemption on the cash surrender value of life insurance, burial contracts, designated burial funds, or a combination of these. If married, the exemption applies to each person separately.

 

FAMIS will apply the CSV $1500 exemption in this order:

    1. Irrevocable pre-need burial contracts or irrevocable Personal Funeral trust accounts
    2. Life insurance cash surrender value
    3. Revocable pre-need burial contracts, revocable Personal Funeral trust accounts
    4. Designated burial funds

Any CSV remaining after the $1500 exemption is exhausted must be counted as a resource.

 

EXAMPLE:

Ms. Y has an irrevocable prepaid burial of $1000, life insurance with CSV of $200 and a $1000 bank account that she states is for her burial. She signs an IM-99 designating this bank account as a burial fund.
Reduce the $1500 exemption by the amount of prepaid burial.
$1500 exemption
–1000 value of burial
$ 500 remaining exemption

 
Reduce remaining exemption by amount of CSV of insurance
– 200 CSV

$ 300 remaining exemption
Apply remaining exemption to designated burial fund.
$1000 burial fund
– 300 remaining exemption
$ 700 Countable resource

 

VERIFICATION:

Obtain documentary evidence to verify each resource.

HC = Documentary verification