Partly. Life insurance paid to a named beneficiary generally goes directly to that person, outside of probate, which keeps it away from the insured person’s creditors in most cases.
Protection for cash value is more limited. Under California Code of Civil Procedure section 704.100, an unmatured policy is generally exempt, but its loan or cash value is only protected up to a dollar amount the state adjusts every few years, and benefits from a matured policy are exempt only to the extent needed to support you and your dependents.
Name specific beneficiaries or a properly drafted trust instead of your estate. Proceeds paid to an estate go through probate, where creditors can make claims. This isn’t legal advice, so consult a California attorney about asset protection for your situation.
Questions about your own policy? Elye Insurance in Mission Viejo helps homeowners and drivers across California and Nevada compare options from multiple carriers.
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