Life Insurance
If I have a Whole Life Insurance policy that has some cash value, why would my Trustee want to see my policy? Can they force a cash out and then I would loose my policy. I would never get a rate like I have since I have had the policy for over 10 years.
Posted from: Ontario
Your life insurance policy is considered an asset – ie something that you own. If it has “cash value” then your trustee is required to recover an amount equal to it’s cash value for the benefit of your unsecured creditors. The first thing your trustee will check is to see who the beneficiaries of the policy are. If the beneficiaries are from the following group of people the policy is protected under the law: grandparents, parents, spouse, children, grandchildren. If the beneficiaries aren’t from this group of people then you will either have to pay an amount equal to the cash out value to keep the policy or your trustee will cash it out to recover the money for your creditors.