Cash Surrender Value of Your Life Insurance Policy Is Probably Protected
A couple of months ago my colleagues David Lampley and Carmen Dellutri both wrote about the importance of protecting 401(k)’s and IRA’s and not taking money from them to pay bills if you can at all avoid it. Their advice continues to be extremely valuable and more important than ever in this economy, but I would like to expand on it here: Don’t take out cash surrender value from life insurance policies to pay your bills either!
As you may or may not be aware, under Florida law, cash surrender values of life insurance polices are, with few exceptions, completely protected from your creditors just like traditional retirement plans are. It is important to think of your life insurance policies as just as much a part of your nest egg as your 401(k) or IRA. But unlike your 401(k) or IRA, you probably did not take out your life insurance policy solely for your own retirement purposes. You probably also had your family in mind, with a desire to provide for them in the event you are unexpectedly taken from them. Don’t jeopardize this extremely invaluable protection by taking money from those policies to pay bills. Any questions regarding this topic, please contact an experienced bankruptcy attorney.
This post was written by Holly McFall, Esq., with Dellutri Law Group.
