A Florida policyowner with large debts dies. His life policy names his daughter as beneficiary. What can his creditors do against the death proceeds?

Why B is correct

Under Florida law (Chapter 627, Florida Statutes), life insurance death proceeds payable to a named beneficiary are generally protected from the claims of the insured's creditors. This standard-provision protection is a major reason families use life insurance to secure income regardless of the insured's debts at death. The protection follows the beneficiary designation, so keeping a living beneficiary named preserves it.

Why the other options are wrong

• A) Proceeds payable to a named beneficiary do not pass through the insured's estate for debt payment.
• C) The protection operates by law, not by the beneficiary's consent.
• D) Creditors cannot force surrender of the policy to intercept the proceeds.

Memory hook

Named beneficiary = creditors left at the door.

Why B is correct

Under Chapter 627, Florida Statutes, benefits payable to a named beneficiary of a life policy are protected from the creditors of the insured. Because the sister is a named living beneficiary, the death proceeds are payable to her directly and never route through the deceased's estate, so his creditors cannot reach them.

Why the other options are wrong

• A) Creditor claims against the insured do not attach to proceeds payable to a named beneficiary under Florida's beneficiary-protection law.
• C) Proceeds pass through probate only when they are payable to the estate; a named beneficiary takes outside it.
• D) The protection extends to any named beneficiary, not only a spouse.

Memory hook

Named beneficiary: creditors of the insured cannot follow.

Why C is correct

Under Chapter 627, Florida Statutes, which governs standard provisions of individual life contracts, life insurance proceeds payable to a named beneficiary are protected from the claims of the insured's creditors. This beneficiary protection is a built-in feature of Florida life insurance: it follows from naming a specific beneficiary rather than the insured's own estate, and it is not limited to group policies.

Why the other options are wrong

• A) Creditors of the insured cannot reach proceeds payable to a named beneficiary under Florida's beneficiary-protection rules.
• B) Proceeds are paid to the named beneficiary, not the estate, unless the estate itself is the named beneficiary.
• D) The protection is a feature of Florida life insurance generally, not only of group coverage.

Memory hook

A named beneficiary means shielded proceeds.