Debtors who are collecting on a debt left by the insured person who died, cannot collect it from the life insurance left to the beneficiary, unless the beneficiary was co-signer on the debt. If the debt was incurred by the beneficiary, then debtors can come after the life insurance that the beneficiary collected upon the death of the Insured.
Owner/ Financial Planner, Laura Knight Insurance Agency, PLLC, Montana
A debtor can collect on the proceeds of a life insurance policy if that party is the beneficiary of a policy.
It can depend on what state you reside in as to whether your life insurance proceeds can be exempt, if you are beneficiary because of statues you should not have any problems.
The Creditor would have to know also that the policy existed to be able to pursue the debt in this manner.
There are state and federal statues regarding creditors rights in insurance.
Insurance was developed to protect against contingencies that might financially interfere with the proceeds that were set up for someones loved ones.
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It can depend on what state you reside in as to whether your life insurance proceeds can be exempt, if you are beneficiary because of statues you should not have any problems.
The Creditor would have to know also that the policy existed to be able to pursue the debt in this manner.
There are state and federal statues regarding creditors rights in insurance.
Insurance was developed to protect against contingencies that might financially interfere with the proceeds that were set up for someones loved ones.