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Getting Help with Medicare Prescription Drug Plan CostsLife Insurance: Face And Cash ValuesSSA Publication No. 05-10108, March 2006 ICN 468720 [View bilingual .pdf] (En Español) (other languages) |
Social Security and the Centers for Medicare & Medicaid Services are working together to get you extra help with your prescription drug costs. To determine if you could be eligible for this extra help, Social Security will need to know your income and the value of your savings, investments and real estate (other than your home). If you have limited income and resources, you may be able to get help paying for your monthly premiums, annual deductibles and prescription co-payments under the new Medicare prescription drug program that began January 1, 2006. Filing an Application for Help with Medicare Prescription Drug Plan Costs (Form SSA-1020) will help Social Security determine if you are eligible. One of the questions on the application deals with face and cash values of life insurance policies. |
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What is the difference between face and cash values?With Question 5, Social Security needs to know whether you (and your spouse, if you live together) have any life insurance policies with a total combined face value of more than $1,500. The face value is the same as the death benefit — the sum of money that is paid when you die. If you answer “Yes” to Question 5, you must report the cash value — that is, the amount you would receive if your insurance policy was cashed in right now — even if it is less than the face value. Important note: If you have any outstanding loans against the policy, the cash value is reduced. Social Security will accept your statement concerning the cash value of your life insurance policy and will not require any further documentation. |
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Do all policies count?No. In determining whether the combined face values (death benefits) of all your life insurance policies exceed $1,500, Social Security will not count:
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Will insurance companies be able to help?Yes. Insurance companies have been informed about the new Medicare prescription drug program and that they may receive inquiries concerning cash values from policyholders or people who are assisting them to apply for this extra help. If you do not know the amount of your policy’s cash value, you may need to contact your life insurance agent or company to get this information. |
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How can I get more information?For more information about getting help with your
prescription drug costs, call Social Security at If you need an application, call Social Security, and ask for the Application for Help with Medicare Prescription Drug Plan Costs To learn more about the Medicare prescription
drug
plans, call |
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