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Endowment Life Insurance Contracts (ELIC)
ELICs are NOT considered life insurance for MC eligibility purposes. Instead, these contracts are considered a legal instrument or device similar to a trust and are to be treated as such for MC eligibility.
Assets held in ELICs are considered available property and included in the property reserve.
When ELICs are purchased, the issuing company promises to hold that money for a person they refer to in the contract as “insured” for a designated number of years. The issuing company then promises to return all that money to the “insured” if he/she is alive at the expiration of the designated time period. If the “insured” dies before the time period expires, the issuing company is contractually obligated to pay the designated beneficiary.
The contracts are for a specific number of years and provide that after the expiration of the designated term, the issuing company will return the initial payment along with some additional money to the insured. The contract provides for a pay out to the insured on a specified date in the future and does not just provide for payment to the named beneficiary upon the death of the insured.
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