When considering filing for bankruptcy or even if you already have, there are many things to think about, such as how it will affect your life insurance.

Even though most bankruptcy courts consider the cash value within a life insurance policy an asset, federal law allows most people filing for bankruptcy to exempt certain types of property from creditors. If you own a permanent life insurance policy, you’ll generally be able to keep a specified amount of the cash value that has accumulated over time.

If you’ve declared bankruptcy, federal exemptions allow you to keep up to $10,775 of a permanent life insurance policy’s cash value. If you’re married, this exemption allowance may double. However, keep in mind that state exemption guidelines vary among all 50 states.

You’re not allowed to claim federal and state exemptions when filing for bankruptcy, so be sure to choose the one that makes the most sense. For example, if you don’t need to use the full exemption amount for real estate you own, you can apply up to $9,850 to protect other assets, such as the cash value within your permanent life insurance policy.

Alternatively, if you’re looking to buy a term life insurance policy after you’ve already declared bankruptcy, there are companies that will work with you to help you meet your needs. Since underwriting guidelines vary among the best life insurance companies, the key is to shop around. Experienced life insurance agents at a multi-carrier brokerage firm can help you apply for an affordable life insurance policy at a company that understands your specific situation.