Can Creditors Claim Life Insurance Benefits? 
So long as there is a named beneficiary to receive the life insurance proceeds upon your death , those proceeds can not be attached or encumbered in any way by a creditor . The proceeds are also not taxable , though the interest or growth that invested proceeds generate are . Now , that having been said , if there is no beneficiary and the proceeds are paid therefore to your estate , as my colleague pointed out , once in the estate , they are fair game . Talk to your Insurance Professional regularly , perhaps once a year , to discuss any changes that may have happened in your life that can affect your Life Insurance . This is also a very good time to review your coverage to be sure it is what you need and that it is still accomplishing what it was indended to accomplish . 