Can The State Take Life Insurance Money? 
Unless illegal activities can be proved neither the State nor the Feds nor any creditor or liens can take your life insurance money . That 's one of the things that makes whole life insurance policies so attractive . Once the beneficiary of a life insurance policy has been paid the benefit proceeds from a policy , while that money is transferred to the beneficiary tax-free it may thereafter be subject to liens if the receiving beneficiary has unpaid liabilities . 