I think they can do that only if you are the owner and insured of the policy. If you are the insured and someone else owns the policy, i.e., parents, then I don't think they can touch it. I offer this opinion based on experience. 23 yr old son filed for bankruptcy, but we, as parents are the owners of his life insurance policies (took them out at "zero" age because it keeps premiums low for lifetime). They were unable to touch them because of this.