Commonwealth Consolidated Acts

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LIFE INSURANCE ACT 1995 - SECT 205

Protection of policy money on person's death

  (1)   If, on the death of a person, money becomes payable to the person's estate under a policy effected on the person's life, the following provisions apply:

  (a)   except as permitted by paragraph   (b), the money is not liable to be applied or made available:

  (i)   under any judgment, order or process of a court; or

  (ii)   in any other manner whatsoever;

    in payment of the person's debts;

  (b)   the money may be applied in payment of a debt of the person if:

  (i)   the person had entered into a contract that provided expressly for the money to be so applied; or

  (ii)   the person had charged the money with the payment of the debt; or

  (iii)   the person gave an express direction, in his or her will or other testamentary document signed by the person, that the money be so applied;

  (c)   none of the following constitutes an express direction for the purposes of subparagraph   (b)(iii):

  (i)   a mere direction that debts be paid;

  (ii)   a charge of debts on the whole or a part of the person's estate;

  (iii)   the creation of a trust for the payment of debts.

  (2)   This section has effect regardless of when a policy was issued.

  (3)   This section has effect subject to the Bankruptcy Act 1966 .


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