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Ely
Ely, Counselor at Law
Category: Family Law
Satisfied Customers: 100566
Experience:  Private practice with focus on family, criminal, PI, consumer protection, and business consultation.
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My ex-husband used a life insurance policy I owned on him as

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My ex-husband used a life insurance policy I owned on him as collateral on a loan 23 years ago. We've been divorced since 1988. Now that he passed away, the insurance company says they have to pay this loan before they pay me. Can I fight this judgment?
Submitted: 5 years ago.
Category: Family Law
Expert:  Ely replied 5 years ago.
Hello,

Welcome to JustAnswer and thank you for the opportunity to assist you. Please remember that there might be a delay between your follow up questions and my answers because I may be helping other clients or taking a break.

I am sorry for your situation. Can you tell me if the life insurance policy had a clause in the contract with him that specifically said that they are to pay the debt before your payout, or you are not sure?
Customer: replied 5 years ago.
The Certificate of Current Coverage simply has one line that says "Richland National Bank & Trust - Assignee". The life insurance policy was a contract with me, not him. I own the policy and have made all the payments. I am waiting for copies of the paperwork to be sent from the bank as I have never seen these documents.
Expert:  Ely replied 5 years ago.
Thank you. It all depends on the policy, I am afraid. The situation that you describe is quite common, I am afraid. If the police is mandated by contract to do this - and usually they agree to pay debts of the estate before payout to beneficiaries, there is really nothing that can be done, I am sorry to say.

I hope you found my answer helpful, and if so please click on the ACCEPT button. This is the only way for me to get credit for my work; I receive no credit for my time with you until you actually press ACCEPT, even if you already have a subscription. If you still need to clarify something or seek more information, just use the REPLY button and I’d be more than happy to follow up to your satisfaction! There is no fee for follow up questions before or after accepting, should you wish to continue in the thread, and I encourage you to do so should you desire clarification.

While the legal system tries to be inclusive of every possibility, sometimes, people are morally wronged but have limited legal avenues to seek relief. If so, please understand that this is not the expert’s fault (in other words, I prefer to tell you the truth rather than tell you what you want to hear, so if the news is not good, please do not shoot the messenger).
Customer: replied 5 years ago.
So even if we were divorced and I owned the policy, I am responsible for his debt when we were no longer married? What if he declared bankruptcy back during this time period? Would that have relieved him/me of his debt?
Expert:  Ely replied 5 years ago.
When you say you owed the policy, do you mean that you were the beneficiary?
Customer: replied 5 years ago.
When I say I owned the policy, I mean that I shopped for a company that would insure his life for an affordable price, I purchased the policy, I paid the premiums since the issue date May 12, 1988, and I am the beneficiary.
Expert:  Ely replied 5 years ago.
Ah, thank you. Even if you were the individual who purchased the policy, he was the beneficiary, and the insurance company does not owe any extra duty to you, I am sorry to say.

The policy's contract may contain a clause that will have them:

1 - pay you directly
2 - pay you only after paying the debt
3 - pay both you and the debt, but not take any money out of your amount.

But in the end, again, it simply depends on the policy. Even if you paid it, it allows you no extra privilege. I am sorry.

I hope you found my answer helpful, and if so please click on the ACCEPT button. This is the only way for me to get credit for my work; I receive no credit for my time with you until you actually press ACCEPT, even if you already have a subscription. If you still need to clarify something or seek more information, just use the REPLY button and I’d be more than happy to follow up to your satisfaction! There is no fee for follow up questions before or after accepting, should you wish to continue in the thread, and I encourage you to do so should you desire clarification.
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