Which type of statute is concerned solely with protecting life insurance proceeds from the claims of the beneficiary's creditors?

• A. A distribution type statute
• B. A New York type statute
• C. A simultaneous death statute
• D. A spendthrift statute

Answer: (D)

Spendthrift statutes are designed to shield life insurance proceeds from the claims of a beneficiary’s creditors. They create protection by preventing creditors from reaching the proceeds or by restricting the beneficiary’s ability to assign, attach, or transfer those funds until they are actually distributed to the beneficiary for his or her use. This kind of statute specifically targets creditor protection for life insurance payouts, unlike rules that govern how proceeds are distributed, address a particular state's approach, or determine who gets the money when death is simultaneous. Though protections exist, there are common exceptions (such as certain support obligations or government claims) that don’t undermine the general purpose of the spendthrift regime. So the type described is the spendthrift statute.