Can Life Insurance Be Taken By Creditors?

  1. 7647 POINTS
    Mark Bartlett CLCS
    Branch Owner, TWFG Insurance Services, Fremont California and the Greater Bay Area Representing Dozens of Insurance Carriers
    If you have outstanding debt there is a possibility I have seen in cases where creditors could take the life insurance proceeds upon the individuals death. The question is vague so I am not sure where you are going with this but you may want to speak with an attorney on your particular situation.
    Answered on April 30, 2013
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  2. 37376 POINTS
    David G. Pipes, CLU®, RICP®
    Business Development Officer, T.D. McNeil Insurance Services, Fresno, California
    A creditor may demand to be named as a loss payee on a life insurance policy.  If you agree to that arrangement the company will, upon your death, contact the creditor to determine the amount needed to satisfy the obligation.  That is then sent to the creditor with the balance being distributed to your beneficiary (ies.)
    Answered on August 22, 2014
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