304.14-300 Exemptions of proceeds, life insurance.
(1)
(2)
If a policy of insurance whether heretofore or hereafter issued, is effected by any
person on his own life, or on another life, in favor of a person other than himself, or,
except in cases of transfer with intent to defraud creditors, if a policy of life
insurance is assigned or in any way made payable to any such person, the lawful
beneficiary or assignee thereof, other than the insured or the person so effecting
such insurance or executors or administrators of such insured or the person so
effecting such insurance, shall be entitled to its proceeds and avails against the
creditors and representatives of the insured and of the person effecting the same,
whether or not the right to change the beneficiary is reserved or permitted and
whether or not the policy is made payable to the person whose life is insured if the
beneficiary or assignee shall predecease such person, and such proceeds and avails
shall be exempt from all liability for any debt of the beneficiary existing at the time
the policy is made available for his use: provided, that subject to the statute of
limitations, the amount of any premiums for such insurance paid with intent to
defraud creditors, with interest thereon, shall inure to their benefit from the
proceeds of the policy; but the insurer issuing the policy shall be discharged of all
liability thereon by payment of its proceeds in accordance with its terms, unless,
before such payment, the insurer shall have received written notice at its principal
office, by or in behalf of a creditor, of a claim to recover for transfer made or
premiums paid with intent to defraud creditors, with specification of the amount
claimed.
For the purposes of subsection (1) of this section, a policy shall also be deemed to
be payable to a person other than the insured if and to the extent that a facility-ofpayment clause or similar clause in the policy permits the insurer to discharge its
obligation after the death of the individual insured by paying the death benefits to a
person as permitted by such clause.
Effective: June 18, 1970
History: Created 1970 Ky. Acts ch. 301, subtit. 14, sec. 30, effective June 18, 1970.
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