My father died recently. I was surprised to learn that he was heavily in debt and that many creditors were chasing after him. I also discovered that he had a life insurance policy and that I was listed as the sole beneficiary . I have now found out that the creditors know about the existence of the policy and are trying to get their money from it. Can they ?
By: דיאנה שאלתיאל•Published on: 13 May, 2022No ! The 1965 Inheritance Law states that money paid as a result of someone’s death according to an insurance contract is not included in his estate, unless it is conditioned otherwise. In the Philosoff Supreme Court case the question arose as to whether the money is included in the estate if the policy states it should be paid to the heirs according to law or according to the will. It was held that in this case they inherit as beneficiaries under the policy not as heirs .
Accordingly, the money from the father’s life insurance policy is not part of his estate and his creditors cannot get their debts paid from it.