Can Bankruptcy Impact Life Insurance?
Scenario: You are in your 70’s, with enough savings to last you another 20 years, with supplementary social security and if you’re lucky, possibly even a hard-won pension to boot. Still, your rising health coverage is an issue that you may struggle with due to rising property taxes for your home.
If you think modern retirement is a struggle, you’re certainly not the only one: bankruptcy among those 65 and older rose 150% between 1992 and 2007. For many mature Americans, bankruptcy is the only recourse to a secure, debt-free retirement.
Can a bankruptcy late in life benefit you? It most certainly can. If you don’t want to jeopardize your retirement with elevating credit card charges, or encumber your children with toppling credit card debt that will be passed down to them after you die. However, you also don’t want to burden them with funeral and burial costs, which even the most basic life insurance plan should cover since the minimal total costs of the average funeral hang high at $9,000.
When you file for bankruptcy, federal regulation dictates that only $10,075 in un-matured life insurance is exempt for single individuals and double that amount for covered married couples. Since this is a federal regulation, individual states can overrule and alter the amount of this exemption. Regardless of geography, bankruptcy trustees can potentially dip into varying amounts of un-matured life insurance to repay your debts in the event of a bankruptcy.
If you have yet to secure a life insurance policy and haven’t emerged discharged from your bankruptcy, you can be denied life insurance. Many insurance companies can state their reason for rejection as bankruptcy. Consequently, it’s ideal to secure a life insurance policy before you file for bankruptcy.
Have any more questions about what kind of bankruptcy you’re eligible for as a retired member of society? Call one of our representatives for a free initial consultation at 1-800-260-1402. We have the expertise to tackle your complex bankruptcy issues, and can keep your most valuable assets—your security—exempt from debt reorganization. Call Legal Helpers for bankruptcy help today!
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