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No. Life insurance is paid the the beneficiary named in the policy, your creditors have no claim against the insurance proceeds EXCEPT if the proceeds are paid to your estate.

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βˆ™ 2012-08-13 22:00:28
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Q: Will my life insurance policy have to pay my student loans?
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Can a life insurance policy have a lien against it?

Yea, a life insurance policy can be mortaged as lien in banks for availing of loans. Even many private companies also provide loans against lien of life insurance policies. Life Insurance Cos provide loan upto 75% of paid up premium against lien of life insurance policy bond of the policy holder.

Can the mother of adult college student take out a life insurance on the student although the father is the parent who signs for the student loans?


Can you take out a loan from all life insurance policies?

No. Only whole life insurance policies (sometimes called "permanent insurance") accumulate cash value. Policy loans are generally available from the accrued cash value. Since term insurance does not gather cash value, policy loans are unavailable.

Will bankruptcy remove life insurance loans?

Life insurance loans are not on your credit report.

Are benefits from a whole life insurance policy taxable?

As a general rule, life insurance proceeds from any type of policy are not taxable to the beneficiary. In addition, any loans from cash value are not taxable unless the policy lapses.

Can loans against life insurance policy be considered a debt of the estate?

Loans coming from a life insurance policy are not debts. If you die and you didn't repay the loan, the loan amount plus interest is deducted from the face amount of the policy. If you cancel the policy or let the policy lapse while there's a loan balance, you will owe income taxes on the loan.

How can one make life insurance loans?

You can make life insurance loans through an insurance agent or bank. You probably first get a life insurance policy. You then fill out an application and the agent will process the application and give the loan. You can borrow up to $500,000 which will be subtracted from you death benefit. You then have to repay the loan off when you are done with it. Life insurance policies are forfeited when you sell you life insurance policy through settlement. Your beneficial will receive the portion of the money you paid back.

What is life insurance policy?

Life Insurance policy: A life insurance policy is an agreement between an insurance company and a person (or legal entity). Each life insurance policy is different, and each state’s laws regulating insurance policies are different.

It is not important to have a life insurance policy.?

It is not important to have a life insurance policy.

Can you borrow money against your life policy?

Yes, if your life insurance policy has accumulated cash value. Not all life insurance policies will accumulate cash value: for example, term life insurance policies will not accumulate any cash value. Whole Life and Universal life policies can accumulate cash value and the policy owner can take loans in the limit of the cash value (some companies limit loans to 70 - 80% of the cash value).

What is the executor on a life insurance policy?

The Policy Holder of a life insurance policy is the executor of the said policy.

Does life insurance have to be used to pay student loans after a persons death?

It depends on who the insurance policy has named as a beneficiary. If the student is listed as the beneficiary then they can spend it however they like. If the beneficiary is a trust then the trust may have stipulations as to how it can be spent and the trustee would then be charged with spending it correctly. All of this would be spelled out in a will or trust.

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