State RegulationsFL specificDifficulty 2/5
A Florida policyowner dies with substantial personal debts. His life policy names his sister as beneficiary. Under Florida law, what is the effect on the death proceeds?
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Answer & full 3-part explanation (select an option above, or peek)
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.