4 Life Insurance Reduction

4.1.1 Reduction for WFCAP Applications Submitted Separately

4.1.2 Reduction for Combined WFCAP Applications

4.1 Life Insurance Reduction

Wis. Stat. § 49.785(1m)(d)

Effective for deaths on or after October 3, 2016, WFCAP payments will be reduced for decedents whose lives are insured for more than $3,000 (see Section 2.9 Life Insurance). An eligible WFCAP payment will be reduced by one dollar for every dollar the face value of the policy exceeds $3,000. The reduction is applied proportionately to funeral and cemetery/crematory expenses based on two possible application scenarios.

4.1.1 Reduction for WFCAP Applications Submitted Separately

When funeral home and cemetery/crematory expenses are submitted in separate applications, the reduction is proportionate to the total available funding ($2,500). Total available funding is the percentage of the maximum policy limits. The funeral home payment will be reduced by 60 percent and the cemetery/crematory payment by 40 percent (refer to example 1).

Example 1: Mr. Smith is named as the insured on a life insurance policy with a face value of $4,000. The total WFCAP payment will be reduced by $1,000 because that is the amount that exceeds $3,000. The service providers submitted separate WFCAP applications, so the reduction applies proportionately based on the total available WFCAP funding (60 percent for funeral homes and 40 percent for cemeteries/crematories).

The funeral home requested and was approved for a WFCAP payment of $1,000 for unmet funeral expenses. After reducing the funeral home’s payment by 60 percent of the excess life insurance amount of $1,000, the funeral home is eligible for a $400 WFCAP payment.

The cemetery requested and was approved for a WFCAP payment of $1,000 for unmet cemetery expenses. After reducing the cemetery’s payment by 40 percent of the excess life insurance amount of $1,000, the cemetery is eligible for a $600 WFCAP payment.

WFCAP Total Available Funding
Service Provider Type	Total WFCAP Available Funding*	Percentage of WFCAP Available Funding
Funeral Home	$ 1,500	60%
Cemetery/Crematory	$ 1,000	40%
Total	$ 2,500	100%
*Maximum policy limits

WFCAP Applications Submitted Separately
For a $4,000 Life Insurance Policy
Service Provider Type	Amount of Life Insurance Over $3K	Percentage Reduction	Amount of Reduction	WFCAP Requested and Approved Amount	Net Available Funding
Funeral Home	$ 1,000	60%	$ (600)	$ 1,000	$ 400
Cemetery/Crematory	$ 1,000	40%	$ (400)	$ 1,000	$ 600

4.1.2 Reduction for Combined WFCAP Applications

When funeral home and cemetery/crematory expenses are submitted on one combined WFCAP application, the reduction is proportionate to the total requested funding, so the percentage reduction will vary based on the amount each service provider requests (refer to example 2).

Example 2: Mr. Smith is named as the insured on a life insurance policy with a face value of $3,500. The total WFCAP payment will be reduced by $500 because that is the amount that exceeds $3,000.

When service providers submit one combined application, the reduction is proportionate to the total requested funding. Each of the service providers requested and were approved for a WFCAP payment of $1,000 for unmet expenses, resulting in a total WFCAP payment request of $2,000. Each service provider requested 50 percent of the total requested funding. Therefore, each service providers’ WFCAP payment will be reduced by $250, which is 50 percent of the excess life insurance amount.

Combined WFCAP Applications
For a $3,500 Life Insurance Policy
Service Provider Type	WFCAP Request Amount	Percentage Reduction	Amount of Life Insurance Over $3K	Amount of Reduction	Net Available Funding
Funeral Home	$ 1,000	50%	$ 500	$ (250)	$ 750
Cemetery/Crematory	$ 1,000	50%	$ 500	$ (250)	$ 750

This page last updated in Release Number: 16-02

Release Date: 10/03/2016

Effective Date: 10/03/2016