Is a life insurance policy a countable resource for SSI?

When an individual applies for Supplemental Security Income (SSI), part of the application process involves looking at household assets. To stay eligible for SSI, the recipient must keep their countable assets under a $2,000 limit ($3,000 for married couples).

According to the Social Security Administration, life insurance is a countable resource if it is owned by the recipient or spouse and has a cash surrender value, unless the total value of all plans on the recipient is less than $1,500 or if the funds are designated as burial funds. Most term life insurance plans do not have a cash surrender value, but often whole life insurance policies do.

Once a child turns 18 years old, parental resources and income are no longer deemed to the child (meaning these resources no longer count toward eligibility). Since a parent is the owner of their own life insurance policy, that policy should not impact eligibility for applicants age 18 and over. Note, however, that as the beneficiary of a life insurance policy, a child’s benefits can be impacted by a payout of a life insurance policy, unless the proceeds go into an account that is excluded from SSI countable resources (such as a special needs trust or ABLE account).

For more information, see the POMS on this topic.