(A) Proceeds and cash surrender values of life insurance payable to a beneficiary other than the insured's estate in which such proceeds and cash surrender values are expressed to be for the primary benefit of the insured's spouse, children, or dependents are exempt from creditors of the insured whether or not the right to change the beneficiary is reserved and whether or not the policy is payable to the insured if the beneficiary dies first except:

(1) if the insured has filed a petition in bankruptcy within two years of purchasing the insurance, such proceeds or cash surrender are only exempt as permitted by Section 15-41-30; or

(2) the amount of premiums paid and interest thereon with intent to defraud creditors;

(3) a creditor possessing a valid assignment from the policyowner may recover from either the cash surrender value or the proceeds of the life insurance policy the amount secured by the assignment with interest.

(B) Proceeds of life insurance or annuity contracts, by agreement, may be held by the insurer exempt from claims of the beneficiary's creditors.

(C) Proceeds of group life insurance contracts are exempt from claims of the creditors of the insured.

(D) Benefits of accident and disability contracts are exempt from claims of the creditors of the insured.

HISTORY: Former 1976 Code Section 38-63-40 [1985 Act No. 189, Section 1] recodified as Section 38-53-40 by 1987 Act No. 155, Section 1; Former 1976 Code Section 38-9-340 [1947 (45) 322; 1952 Code Section 37-169; 1962 Code Section 37-169] recodified as Section 38-63-40 by 1987 Act No. 155, Section 1; 1988 Act No. 305, Section 1; 1993 Act No. 89, Section 1.