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Life Insurance

Excerpted from "Social Security Handbook". See the up-to-date, official Social Security Handbook at

2159. Life Insurance

2159.1 Is life insurance considered a resource?

Life insurance is a resource if:

  1. You own it; and

  2. It has a cash surrender value.

For example, burial insurance and most kinds of term insurance have no cash surrender value. These are not resources.

2159.2 Can life insurance with a cash surrender value be excluded from resources?

Life insurance that has a cash surrender value and is owned by you (or your spouse) is excluded from countable resources if the total face value of all policies you own on any one person is not more than $1,500. However, if the total face value of such insurance is more than $1,500, then the total cash surrender value of the insurance counts as a resource, unless it is designated as funds set aside for burial. (See §2161.)

Last Revised: March, 2001

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There are 8 Comments

This would depend on the facts and circumstances (nature of the policy), but in general this would probably be frowned upon for two reasons.

1) SSI is designed to provide cash to meet basic needs for food, clothing, and shelter.

2) Whole life insurance generally will grow in value, and based on the above handbook page, become a countable resource which will reduce or eliminate your SSI payment.

My friends mom is receiving SSI , and my friend wants to buy life insurance for her mom with the face value of $50,000. Is this going to affecting her mom getting SSI?

You may be able to get SSI if your resources are worth no more than $2,000. A couple may be able to get SSI if they have resources worth no more than $3,000. If you own property that you are trying to sell, you may be able to get SSI while trying to sell it.

Social Security does not count everything you own in deciding whether you have too many resources to qualify for SSI. For example, they do not count:

  • A home (and adjacent land) where a person lives;
  • Personal effects or household goods with a total value of $2,000 or less. If the total value is more than $2,000, the amount over $2,000 counts. The value is what an item can be sold for, less the amount of any legal debt against it;
  • One car, usually;
  • Life insurance policies with a total face value of $1,500 or less per person;

I am curious if a life insurance policy, face amount of $25,000.00, can be transferred to someone other than a SSI recipient, so that SSI benefits can continue, and, the recipient (SSI) still be the insured by the policy?

I received a letter telling me I have an appointment on August * at 1pm but I do not drive any more so I called to see if I could set up a phone interview but no one got on the phone or called back . I am 64 years old and will be 65 in Feb. I do have a bank account which my check is direct deposited in each month but I do my banking on line because again I do not drive . My bank is Bank Of America, like I said I do my banking on line but you are free to call them here is the number of the one closet to my home 410-abc-wxyz ,I do not own life insurance policy or a grave site receive no pension do not work or receive unemployment but I am retired.I do not have any taxable income and i am willing to talk to anyone that wants to call me my number is 443-abc-wxyz I left a message for a Ms. Nicholas at the office at 6820 nHospital Drive at 2:50 on 8/1/13. I thank you for your time and wait for a reply,I have no other income except Social Security .

Yours Truly

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