§ 704.100.Unmatured Life Insurance Policies

Life insurance gets three different layers of protection depending on what part of the policy a creditor is after. The policy itself, while unmatured — including endowment and annuity policies — is fully exempt without any claim, but that blanket protection doesn't extend to the policy's loan value, the cash a debtor could borrow against it.

That loan value gets its own, narrower exemption instead: up to $13,975 in aggregate loan value across all of a debtor's unmatured policies. A married debtor gets a separate $13,975 exemption, and spouses can combine their two exemptions into one larger pool — regardless of which spouse owns which policy, and even if both spouses are judgment debtors under the same judgment. When the exemption doesn't cover every policy, it applies first to policies other than the one directly before the court, and only reaches the policy before the court if anything is left over.

Once a policy matures and pays out, subdivision (c) takes over: benefits from matured life insurance, endowment, and annuity policies are exempt only to the extent reasonably necessary for the support of the debtor and the debtor's spouse and dependents — a support-based test rather than a flat dollar figure.