L&HPennsylvaniamedium
Under Pennsylvania's spendthrift statute for life insurance, what protection does a properly structured spendthrift clause provide to the beneficiary?
AIt exempts the proceeds from federal income tax.
It shields the proceeds from claims of the beneficiary's creditors while held by the insurer.
CIt allows the policyowner to reclaim and redirect the proceeds after the insured's death, overriding the beneficiary's interest.
DIt guarantees a minimum interest rate set by the PID.
Why this is the answer
40 P.S. § 514 permits a spendthrift restriction in a life insurance settlement so that proceeds payable in installments or otherwise retained by the insurer are protected from the beneficiary's creditors during the holding period.
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