Life insurance proceeds in a bankruptcy

427 viewsBankruptcy
0
0 Comments

Life insurance proceeds in a bankruptcy

Life insurance proceeds in a bankruptcyI have received a life insurance payout after my husband passed.  We were both in active bankruptcy at the time.

I received a notice from Sunlife that a policy existed that my husband had taken out.  The Face value just over 30k.  On that policy, I was given the choice to pick a lump sum payment or a monthly annuity.

I was advised to take the annuity because the lump sum would be considered an asset.  I don’t understand why my trustee is trying to take all of the funds.  Is this legal?   I’m not trying not to pay. I just don’t see how they get to decide how.

Are they are within their right to do so. I just want verification.

Thanks

Facebook Comments
Changed status to publish
0

According to the Office of the Superintendent of Bankruptcy the insurance proceeds belong to the trustee.

Directive #25R states (in part):
“Life Insurance
Although insurance legislation varies from one province to another, generally the trustee is entitled to realize the proceeds of a life insurance policy if payable to the estate of the bankrupt.”

Yours truly,

Earl Sands, Licensed Insolvency Trustee

Facebook Comments
Answered question
Facebook Comments