HB0295 Summary: Prepaid Funeral or Burial Contracts

• Allows irrevocable assignment of life insurance policy rights to funeral homes to facilitate Medicaid eligibility, with procedures defined in new Section 245.3 of the Illinois Insurance Code.

• Permits existing whole life insurance policies to be used for prepaid funeral contracts up to $6,774 (adjusted annually for inflation) through irrevocable beneficiary designation forms prepared by the Department of Healthcare and Family Services.

• Upon insured's death, life insurance proceeds are distributed in priority order: first to funeral home for contracted services, second to State of Illinois for medical assistance repayment, third to secondary beneficiaries or estate for remaining amounts.

• Increases the Medicaid exemption for irrevocable prepaid funeral contracts from $5,874 to $6,774, adjusted annually for Consumer Price Index increases.

• Requires funeral homes to retain copies of irrevocable beneficiary designation forms and report annually to the Comptroller with policy details, current values, and insurance company information.