1. (1) This section does not apply to a contract to which Section 75A-5-409 applies.

2. (2)

   1. (a) Except as otherwise provided in Subsection (3), a fiduciary shall allocate to principal the proceeds of a life insurance policy or other contract received by the fiduciary as beneficiary, including a contract that insures against damage to, destruction of, or loss of title to an asset.

   2. (b) The fiduciary shall allocate dividends on an insurance policy:

      1. (i) to income, to the extent premiums on the policy are paid from income; and
      2. (ii) to principal, to the extent premiums on the policy are paid from principal.

3. (3) A fiduciary shall allocate to income proceeds of a contract that insures the fiduciary against loss of:

   1. (a) occupancy or other use by a current income beneficiary;
   2. (b) income; or
   3. (c) subject to Section 75A-5-403, profits from a business.

Renumbered and Amended by Chapter 364, 2024 General Session