In June of 2011, the Nevada legislature passed SB 348, a law that increases amounts of insurance policies and annuities that are exempt from creditors. Previously, debtors were allowed to exempt “all money, benefits, privileges, and immunities” arising out of an insurance policy if the annual premium was less than or equal to $15,000. (If the annual premium exceeded $15,000, debtors were allowed to exempt only a portion of insurance proceeds.) SB 348 removes the $15,000 annual premium limitation. Now, the law simply is that all interests in insurance policies and insurance proceeds are exempt from execution, in a civil lawsuit or in bankruptcy. (SB 348 eliminates language NRS 21.090(1)(k) to make this change.)
With regard to annuities, SB 348 amends NRS 687B.290 to remove limitations on the amount of monthly annuity benefits that debtors can exempt from creditors. Prior law allowed debtors to exempt annuity benefits up to $350 per month. So, any amounts a debtor received above $350 per month would be deemed non-exempt and debtors in bankruptcy would have to surrender amounts above that to the bankruptcy trustee. Now, bankruptcy debtors can keep all annuity benefits out of the reach of their creditors. This is an important change for debtors who are relying on annuities to provide part, or all, of their retirement income.