Remember survey courses from college?
Kinda like flying low over new territory without ever landing and getting on the ground?
That’s what I propose to do with the topic of insurance. Insurance, as we see it in bankruptcy.
It isn’t frequently a hot topic, but when it is, the numbers are large and the possibility for egg on your face is equally large.
Policies owned by the debtor
Insurance, a contract with a provider to pay on the occurance of a specified event, is an asset. It needs to be scheduled.
Our local practice about scheduling term insurance (pure insurance with no accumulated value) has gone back and forth.
For purposes of symmetry with schedules I and J, I like to schedule it. If the debtor is paying for insurance, it makes sense to list it. Otherwise, it’s like budgeting for pet care for a pet not visible on the schedules.
If it has a value that the debtor can borrow against or otherwise tap, that value needs to be scheduled.
From an asset perspective, it doesn’t matter whose live is insured.