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Maybe not the right place to ask this but here goes...
If you are named a beneficiary in a term life insurance policy, and it pays out (i.e. the insured dies), is the claim/payout public information to creditors or potential creditors?
Good question.. I'd like to know also. Please.
@Anonymous wrote:Maybe not the right place to ask this but here goes...
If you are named a beneficiary in a term life insurance policy, and it pays out (i.e. the insured dies), is the claim/payout public information to creditors or potential creditors?
No.
Caveat: if the policy was somehow part of a court proceeding (like probate) but this is highly unlikely as circumvention of probate is one of the attractions of life insurance.
The simple answer is no.
The thing is that life insurance is not locked to yourself only. It is perfectly fair to take out a life insurance policy on a random stranger going down the street. Not advisable as an investment or likely to find a insurer that will play with it but doable. Likewise the person it pays out to can be selected at will as well. When you have a policy that paid on death of random stranger to your friend where do you expect the payout info be placed? The only place is at the insurance company. Also the payouts bypass most legal process that happens after death because it usually is just a payment for injury even though it is fatal.
If you look into history there have been plenty of cases where employers took out life insurance policies on their staff or even the husband taking out a policy on the wife or mistress. Nothing new.
@zerofire wrote:... It is perfectly fair to take out a life insurance policy on a random stranger going down the street ...
There must be an "insurable interest" to mitigate adverse selection. Strangers do not have an insurable interest in each others life. So, no, this example would never be allowed to happen.
Most sports employers insure their atheletes, they pay them a lot of money and those players are worth a lot of money on the transfer market, so they insure their assets.