(a) Except as otherwise provided in subsection (b), a fiduciary shall allocate to principal the proceeds of a life insurance policy or other contract in which the trust or its fiduciary is named as beneficiary, including a contract that insures the trust or its fiduciary against loss for damage to, destruction of, or loss of title to a trust asset. The fiduciary shall allocate dividends on an insurance policy to income if the premiums on the policy are paid from income, and to principal if the premiums are paid from principal.
(b) A fiduciary shall allocate to income proceeds of a contract that insures the fiduciary against loss of occupancy or other use by an income beneficiary, loss of income, or, subject to Section 19-3A-403, loss of profits from a business.
(c) This section does not apply to a contract to which Section 19-3A-409 applies.
Structure Code of Alabama
Title 19 - Fiduciaries and Trusts.
Chapter 3A - Alabama Principal and Income Act.
Article 4 - Allocation of Receipts During Administration.
Section 19-3A-401 - Character of Receipts.
Section 19-3A-402 - Distributions From Trust or Decedent's Estate.
Section 19-3A-403 - Business and Other Activities Conducted by Fiduciary.
Section 19-3A-404 - Principal Receipts.
Section 19-3A-405 - Rental Property.
Section 19-3A-406 - Bonds and Other Obligations.
Section 19-3A-407 - Insurance Policies and Similar Contracts.
Section 19-3A-408 - Insubstantial Allocations Not Required.
Section 19-3A-409 - Deferred Compensation, Annuities, and Similar Payments.
Section 19-3A-410 - Liquidating Assets.
Section 19-3A-411 - Minerals, Water, and Other Natural Resources.
Section 19-3A-413 - Property Not Productive of Income.