Spendthrift Clause
The provision protecting proceeds from creditors of the beneficiary by forbidding the beneficiary from commuting, assigning, or anticipating settlement installments before actually received.
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Practice This Concept
A life insurance policy contains a spendthrift clause. This provision means that:
The beneficiary cannot assign or be forced to surrender the proceeds to creditors before receiving them — A spendthrift clause protects the beneficiary from creditors and from his or her own improvidence: the proceeds cannot be assigned, attached, or seized by creditors before they are paid out. Once the beneficiary actually receives the money, creditor protections end. It does not affect the owner's right to change beneficiaries.
National insurance concept
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