Cashing in life insurance policy

Discussion in 'Countable Income' started by Kaiya, Feb 24, 2017.

  1. Kaiya

    Kaiya Newbie

    My Dad, a WWII veteran, applied for Aid and Attendance pension on November 28, 2016. One month later, the VA requested additional information and said that since the claim was now not a fully developed claim as was originally filed, the application would lose its expedited status. I took this to mean that my Dad's claim would go back to the bottom of the pile. Due to his advanced age (95) when he filed the additional information about rental income and expense, and the house's value, we included a request that his claim be expedited. My brother received the return receipt postcard from the VA on January 20, 2017. As of February 23, we have not heard directly from the VA. How long do you have to wait until we ask what the status is of the application? Is it okay to email a request for status of the application? Or do we have to call? My Dad filed the authorization for a third party to receive information naming my brother. Does that mean only my brother can call or write to the VA for information about our fathers' claim?
    I am concerned that since we did not send bank statements to prove rental income and expenses for the 12 months of 2016, we are experiencing delay and maybe even denial of the claim.

    While we are waiting for communication and a decision from the VA, my Dad's house, which he rents out to fund his assisted living costs, got flooded and needs expensive repairs. He has cash value in his life insurance policy of several thousand dollars. If he cashes out his life insurance policy in order to pay for the house repairs, does the VA consider that income, even though it's going straight to paying for the repairs and he will not see any of it to pay for his care expenses? He does not has the funds to write a check for the repairs without depleting his remaining money.

    Do we have to file another statement with additional information about cashing a life insurance policy, if he does cash it? We have not received an acknowledgement or a decision from the VA.

    Thank you for your help.
  2. Kaylin

    Kaylin Hero Member Staff Member

    For an expedited claim like your father's I would wait no longer than 2 months from the Jan. 20th 2017 date to request an update on the status of the application. Or you can just directly reach out to the state Senator where your father lives and ask for a congressional inquiry to be made due to his advanced age. The VA has to respond to a congressional inquiry within 1 month. I would call to request any updates.

    If your father does cash out his life insurance policy then, yes, that would then be considered an asset to the VA. You would have to update the VA on how much money he cashed out and how that money was spent. Details are key for this situation I believe. You would use Statement in Support of Claim form 21-4138 to update the VA on this situation.

    It's up to you whether you want to request the congressional inquiry first or cash out the life insurance policy first. I can understand your father's situation in that he needs the rental income to help him afford his care, though.
  3. Kaiya

    Kaiya Newbie

    I'm writing to update you on my father's pension application. On April 3, I mailed my father's request for assistance to his Senator in Hawaii. On April 11, my brother received a phone call from the Senator's office in Honolulu. The VA is in the final stages of working on our father's claim. It should take 2 - 3 weeks more and we should call the Senator's office back in 4 weeks if we don't hear from the VA by then.
    Thank you for all your assistance. I really appreciate it.
    ps-On March 26, my brother and I accompanied our father to the 442nd RCT 74th anniversary banquet in Honolulu. It was amazing that he made it to the banquet since he doesn't go out--it's too taxing for him.
    Kaylin likes this.
  4. Kaylin

    Kaylin Hero Member Staff Member

    Thank you for updating us, Kaiya! That's great news. I hope your father receives his pension benefit with haste.

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