by Guest » Fri Feb 06, 2009 09:30 am
Well friends, I'm contemplating about filing bankruptcy, but I've a small life policy on which I have made regular payments so far. I'd like to know how the bankruptcy would affect my policy.
Can the debtors put a lien on the cash value of the policy? Also, what would happen to the money that I've paid towards it, would it get forfeited? :roll:
Can the debtors put a lien on the cash value of the policy? Also, what would happen to the money that I've paid towards it, would it get forfeited? :roll:
Posted: Sat Feb 07, 2009 11:17 pm Post Subject:
The money you've paid towards it is already gone - you received a service (the life insurance) in exchange for your premium. The cash value that may have accumulated could be subject to being held as it is considered an asset.
Posted: Sun Feb 08, 2009 09:06 am Post Subject:
worriedjack wrote:
Can the debtors put a lien on the cash value of the policy?
Not in Florida.
In Florida, life insurance cash surrender values and annuity cash surrender values are EXEMPT from legal process.
Florida Statute 222.14
222.14 Exemption of cash surrender value of life insurance policies and annuity contracts from legal process.--
The cash surrender values of life insurance policies issued upon the lives of citizens or residents of the state and the proceeds of annuity contracts issued to citizens or residents of the state, upon whatever form, shall not in any case be liable to attachment, garnishment or legal process in favor of any creditor of the person whose life is so insured or of any creditor of the person who is the beneficiary of such annuity contract, unless the insurance policy or annuity contract was effected for the benefit of such creditor.
Posted: Sun Feb 08, 2009 06:56 pm Post Subject:
Florida/CA/ny have some strange rules...
Posted: Sun Feb 08, 2009 08:36 pm Post Subject:
Florida wants to attract multi-millionaires.
That's why the millionaires move to Florida. Their home and their money is SAFE here if structured correctly.
Of course there's also the OJ's of the world but I don't think he lives in Florida anymore, regardless, his NFL annuities are EXEMPT.
Posted: Tue Feb 10, 2009 10:54 am Post Subject:
In Florida, life insurance cash surrender values and annuity cash surrender values are EXEMPT from legal process.
Is this same everywhere or it is only specific to Florida? I'm in Idaho, does it make a difference?
Okay, Dgoldenz, so if I can't continue paying the premium the policy would lapse. Also, I won't get the money back for the years I've paid the premium, right?
Posted: Tue Feb 10, 2009 08:16 pm Post Subject:
Okay, Dgoldenz, so if I can't continue paying the premium the policy would lapse. Also, I won't get the money back for the years I've paid the premium.
You wouldn't get the premium back either way. You paid for a service and received that service, you just happened to not die before terminating the coverage. If you don't pay the premiums, the coverage will lapse.
Posted: Wed Feb 11, 2009 03:57 am Post Subject:
Okay, so my chances of getting back the money that that I've spent for the coverage is zero, not a very good news for someone who is in dire need of money though. :(
However, how would it affect my future premiums and insurability? I've heard that the insurers also pull the credit report of the insured during the underwriting process, is it true?
Posted: Wed Feb 11, 2009 01:25 pm Post Subject:
It depends on what policy you have. If your policy has no cash surrender value then you can't get money from it. If you buy a life insurance, the money you use to buy it will not be given back to you. But if the policy you have has cash surrender value then you can surrender it and get total cash.
Posted: Wed Feb 18, 2009 06:20 pm Post Subject:
woriedjack!
I hope there may have an option of loan against policy, as is here in my state, specially mentioned because you explained your situation.
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