I know what you own must stand good for what you owe before you could leave anything to anyone... but if you have a negative net worth, is your life insurance money required to pay those debts since you technically never own that money?

Usually no, provided you have a valid beneficiary designated. If you haven't designated a beneficiary or your designated beneficiary is deceased or otherwise invalid, your estate becomes the beneficiary by default and then the money would be available to your creditors.

There are some exceptions to that, but that is the general rule.

Ok thanks... I have my wife as the beneficiary and a trust for my children as the secondary.