Can the proceeds of a policy be protected against creditor’s claims in the event of the insolvency of a policyholder?The proceeds of a life insurance policy can be protected against the claims of creditors under specific circumstances. One, if the policy is issued under the Married Women’s Property Act and, second, if the policy is legally assigned in favour of a third party. The option of taking a policy under the MWPA has to be exercised at the time of taking the policy. It cannot be done later. A policy that has been legally assigned in favour of somebody becomes that person’s or assignee’s property and, therefore, cannot be attached by the creditors of the policyholder.
