Can Credit card companies demand a portion or all of Life insurance given to heirs and beneficiaries you choose?

  • by Coffeeman
  • Nov 24,2015
  • 7 answers

Can Credit card companies demand a portion or all of Life insurance given to heirs and beneficiaries you choose?


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Insurance Answers (7)

Bill 6 months ago

No life insurance proceeds are not part of the estate.

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mbrcatz 6 months ago

Look, you're talking about two different things. If you name heirs and beneficiaries, then the life insurance pays out to them directly - and your creditors cannot take the money (but their creditors could, potentially.)
However, if you name your ESTATE as beneficiary, and ask the money to be distributed in your will, well, NOTHING in your estate can go to your heirs until after ALL of your debts have been paid off - including your final medical costs, funeral costs, credit card bills, and any OTHER outstanding loans or debt you may have.
That's why it's important to use an advisor when setting up your estate plans - so things happen, they way you want them to, after you kick off.

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wg0z 6 months ago

only if your estate is the beneficiary of the policy.

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Bob 6 months ago

If you are speaking about settling the finances of someone that has passed away, the answer is yes. Debtors have first claim on the estates.

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Casey Y 6 months ago

If you have named beneficiaries on the policy AND they are still alive when you pass away, that money is excepted from the estate and not considered an asset.
If you don't have a living beneficiary (primary or contingent), then the money would pass into your estate and be exposed to debtors and estate taxes.

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jmm2112 6 months ago

No. Life insurance benefits are paid directly and only to the named beneficiaries on the policy. Being an "heir" has nothing to do with it as the insurance benefit is not part of the estate.. Once the beneficiary receives the payment, it is his/hers.
To answer your other question, when a persons dies the ESTATE is responsible for paying outstanding debts with the available assets in the estate. That occurs PRIOR to any assets being passed on to heirs.

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Master 6 months ago

Generally no, Upon death the claim will be paid to the named beneficiary, it does NOT go into the decedent's estate. While it may be possible unless he has somehow added the CC Company into a life insurance trust. At this point I would suggest getting a legal opinion. Take everything you have regarding this, organize it by date perhaps. An ESQ. could probably tell you in ten minutes if you have a problem or not.

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