Double Asset Protection
Let that title sink in a moment.
"Double Asset Protection"
What I don't understand is why every Fraternal Insurance Company is not screaming this from all their advertising outlets.
Your thinking: "The Insurance Nerd has really lost his mind this time."
Well, maybe, but not on this point.
Tennessee Code Annotated 56-7-203 states:
The net amount payable under any policy of life insurance or under any annuity contract upon the life of any person made for the benefit of, or assigned to, the spouse and/or children, or dependent relatives of the persons, shall be exempt from all claims of the creditors of the person arising out of or based upon any obligation created after January 1, 1932, whether or not the right to change the named beneficiary is reserved by or permitted to that person.
That's the first layer.
So, any money in any permanent life insurance or annuity contract "upon the life of any person made for the benefit of, or assigned to, the spouse and/or children, or dependent relatives of the persons, shall be exempt from all claims of the creditors". That means that the insurance policy that you question whether or not you should have or take out looks more appealing now, right?
But wait, there's more!
Tennessee Code Annotated 56-25-403 states:
No money or other benefit, charity, relief or aid to be paid, provided or rendered by any society, shall be liable to attachment, garnishment or other process, or to be seized, taken, appropriated or applied by any legal or equitable process or operation of law to pay any debt or liability of a member or beneficiary, or any other person who may have a right thereunder, either before or after payment by the society.
That's the second layer.
Put that same money in a life insurance or annuity policy (already protected by the first layer) with a Fraternal Insurer like Gleaner (my favorite) or Thrivent (my second favorite) and the law protects it twice! Twice!
No fancy or complicated trust.
No expensive planning.
Take the "plain Jane" permanent life or annuity policy off the shelf, put money in it, have your family as the beneficiaries and it's protected. If it's Fraternal, it has double protection. Not to mention that most, if not every, fraternal insurer has extra benefits, not given by their non-fraternal competitors.
Why doesn't every business owner with at least $50,000 in assets they need to protect have this? Why isn't every life insurance agent screaming about this? This isn't rocket science. This isn't "morally questionable". It's the law.
Got questions? I'm here to help.