Increasing The Amount Of Life Insurance Money Exempt From Creditors

The 2010 Colorado legislative ended last week, with mixed reactions from lawmakers (seemingly divided along party lines in terms of whether they felt that the session was bipartisan or not).  One of the bills that passed was Senate Bill 147, sponsored by Senators Lundberg, Penry, King K., and Sandoval.

SB 147 will allow up to $100,000 of life insurance proceeds to be exempt from the insured’s creditors.  This law will go into effect on September 1, 2010.  Until then, the current cap of $50,000 will apply.  26 states have an unlimited exemption for the protection of life insurance settlements from an insured’s creditors.  The new Colorado law will bring the state a little closer to the protections offered to beneficiaries in other states, although $100,000 still isn’t really a lot of money in terms of protecting a family’s financial future if the primary earner dies.

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