HRS §431:10D-113
What can be taken out of a life insurance payout
This section says that when a life insurance company figures out how much to pay on a policy, it can subtract certain amounts. It can take out unpaid premiums for the current year and any money you still owe on a policy loan, including interest.
beneficiariesborrowers
The statute, as written — Indebtedness deducted from proceeds
In determining the amount due under any life insurance policy issued, deduction may be made of: (1) Any unpaid premiums or installments thereof for the current policy year due under the terms of the policy, and (2) The amount of principal and accrued interest of any policy loan or other indebtedness against the policy then remaining unpaid, such principal increased by unpaid interest and compounded as provided in this part.
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