It depends. If the life insurance policy has a named beneficiary, then typically the insurance company will release the funds directly to that person after the paperwork is filed. If there is no named beneficiary, then the life insurance policy will be processed as part of the estate. If processed as part of the Estate, the proceeds are subject to creditors claims. If the policy is paid to a named beneficiary, then those funds are exempt from creditors claims. The only exception to paying the proceeds to a named beneficiary is if the funds are necessary to fund a spouse’s elective share.