Want to shelter your assets from the prying eyes of the IRS, claims of creditors, or the public? Cash surrender value and life insurance proceeds are exempt from creditors in most states. In this episode, we’re talking about the privacy and creditor protection of life insurance.

https://youtu.be/yu7D09hTe3M

So, if you want to know how to protect your wealth, from future risk of litigation, civil suits, bankruptcy, or even divorce … tune in below!

Table of contentsWhere Creditor Protection of Life Insurance Fits In The Bigger PicturePrivacy and Protection LiabilityLiability Insurance and AutoThe Privacy of a Life Insurance PolicyCreditor Protection of Life Insurance Cash ValueFederal LawHow Creditor Protection of Life Insurance Policies Varies by StateWhat states protect life insurance cash value from creditors?When Life Insurance Exemptions Don't ApplyOther Types of Asset ProtectionFor More Information on Protection From the Claims of CreditorsOrganize Your Finances or Get Life Insurance Today

Where Creditor Protection of Life Insurance Fits In The Bigger Picture

Life Insurance is just one step in the greater Cash Flow System.

While it’s nestled into Stage 2, Protection, it also improves everything else around it.  Infinite Banking helps you keep more of the money you make in Stage 1, amplify your cash-flowing asset strategy in Stage 3, and accelerate your Time and Money Freedom.

Privacy and Protection Liability

Privacy and protection liability are never something you need until you actually need them. In other words, most of us operate as if “it won’t happen to us,” and when an event occurs, it’s too late to protect against.

For protection from creditors, and protection in bankruptcy, it it’s not the wealthiest who need protection the most. Although they're the most likely to protect their wealth. The people who should be most interested in asset protection are those who have fewer assets and cannot afford to lose them.

Asset protection isn’t the most exciting topic, yet it is something that the wealthy think about. Success leaves clues--follow these clues that the wealthy leave and see how they grow and protect their assets. 

Liability Insurance and Auto

A Property and Casualty insurance agent once said people don’t think about liability until after the fact. So much so, that many people think that their auto insurance covers all liability. It doesn’t. So if your dog bites somebody at the park, and causes an injury that lands them in the hospital, those hospital bills can come back to you. If the bills are above your liability coverage, a creditor can take this debt and potentially use up your assets to cover it. 

Small or random incidents like this can happen, and they do happen all the time. Then, because we don’t think we need protection from them, we don’t have it in our times of need. It’s one thing to have an emergency or opportunity fund, it’s another thing to have a protected asset to act as this fund, that creditors cannot garnish or seize. 

The Privacy of a Life Insurance Policy

Life insurance is an incredibly private asset, meaning that no one can really see past that insurance barrier and know how much wealth you have. Privacy, especially around finance, is a significant concern in our society.

Privacy is a huge advantage of whole life insurance. You don't need to report your life insurance policy's earnings to the federal government. It’s so private, in fact, that you need not report it as an asset when applying for federal aid.

If your child is applying for college assistance through FAFSA, you don’t need to include your life insurance policies on the form. This can help your student receive better funding. Nor are you required to list it as an asset on loan applications, although sometimes it can help you secure better loans.

Creditor Protection of Life Insurance Cash Value

As a living asset,