Can Debtors Collect Life Insurance? 
A debtor can collect on the proceeds of a life insurance policy if that party is the beneficiary of a policy . It can depend on what state you reside in as to whether your life insurance proceeds can be exempt , if you are beneficiary because of statues you should not have any problems . The Creditor would have to know also that the policy existed to be able to pursue the debt in this manner . There are state and federal statues regarding creditors rights in insurance . Insurance was developed to protect against contingencies that might financially interfere with the proceeds that were set up for someones loved ones . 