Agent Owner, Gilmore Insurance Services, Marysville, Washington State
Can Debtors take life insurance? Couple ways to answer this question as I think it may be a bit off. People in Debt can take out life insurance, but it will actually depend on how bad it is. Life Insurance companies will credit your credit ratings and may decline to cover a person if their finances are bad.
Did you mean "Can Creditors take your life insurance?" In most cases NO. It's going to depend on what state you're in for complete details, but usually the courts exclude life insurance from settlements because the beneficairy is an "innocent" party to the problem.
If you mean can creditors, rather than debtors, take life insurance proceeds upon the death of the insured, they generally cannot as long as the beneficiary of the policy is a person. If the beneficiary is the estate, creditors can go after the estate for payment of past debts on the part of the insured.
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Did you mean "Can Creditors take your life insurance?" In most cases NO. It's going to depend on what state you're in for complete details, but usually the courts exclude life insurance from settlements because the beneficairy is an "innocent" party to the problem.