Life insurance proceeds usually go directly to beneficiaries and are protected from creditors. Exceptions include no named beneficiaries, deceased or unlocatable beneficiaries, policies designed to repay debts, or bankruptcy affecting cash value. Beneficiaries may face personal liability for debts in certain states or situations. To protect benefits, name and update beneficiaries, provide their contact info, or use an irrevocable life insurance trust. Consulting a professional is advised if facing creditor claims.