Which clause ensures that proceeds of a life insurance policy will be free from attachment or seizure by the beneficiary's creditors?

The spendthrift clause serves a crucial role in protecting the proceeds of a life insurance policy from being claimed by the creditors of the beneficiary. When this clause is included in a policy, it prevents beneficiaries from using the policy proceeds as collateral for debt, thereby safeguarding the funds from attachment or seizure. Essentially, it restricts the rights of creditors to access these benefits, ensuring that the money is used only for the intended purpose established by the policyholder, which is to provide financial support to the named beneficiary upon the policyholder's death.

The presence of a spendthrift clause reassures policyholders that their beneficiaries will receive the full amount specified in the policy without the risk of it being diminished or seized due to the beneficiary's financial issues. This additional layer of security is particularly important in situations where a beneficiary may have existing debts or be prone to financial instability. By including this clause, policyholders can have peace of mind knowing that their intentions will be honored without outside interference from creditors.