Can Creditors Take A Life Insurance Policy? 
The answer to this questions depends on a few specifics . In many states , a creditor can not take the cash values of a life insurance policy from a policy owner -LRB- this is not true of all states , however -RRB- . For death benefit , as long as the death benefit is paid to a beneficiary who is not a party to the loan for which the creditor is trying to collect money , the creditor would not be able to take life insurance proceeds , unless those proceeds were paid to the policy owner 's estate , at which point in time they would need to be distributed through the probate process , and the creditor would have the ability to file claim against the estate in an attempt to recover monies owed . 