If you are a beneficiary of a loved one’s life insurance policy and they have passed away, you might be wondering what’s next. Once you receive your payout from the life insurance company, you can use some of the money to pay for the final expenses of your loved one, but it might feel overwhelming figuring out what you should do with the rest of the money. To help you take the next steps, we have some things to think about when you are left with life insurance money.
How Life Insurance Payouts Work
If this is your first time receiving life insurance money, and you don’t know how the process works, don’t stress. It’s all relatively simple. If your loved one passes away, you will need to notify the life insurance company by providing them with the proper documentation of their passing. If you were unaware of your loved one’s life insurance policy, the life insurance company might reach out to you based on the information they have.
Once the claim process is set in motion, you will receive the death benefits relatively quickly, normally within 2 weeks or less, unless there is an issue surrounding the death of the policyholder (e.g., they died by suicide or gave false information in their policy application).
Any money you receive will be interest-free, which is great! The next step is to decide how you should use the money.
What to Do with the Money
If you are wondering what you should do with the money, consider the following options:
- Pay off debts– Did you know that the average American has around $90,000 of debt? That’s a lot of money! You can use the money to pay off any debts that the policyholder left behind, or you can use it to pay off any debts you have.
- Save it– You can opt to save the money for any future needs, or as an emergency fund. If you have young children, it would be a great idea to invest your payout and save it as a college fund for them.
- Replace income– If you relied on the policyholder’s income to pay for household expenses and other bills, your payout can help replace that income. You can use the money to help pay the bills for many years to come.
Losing a loved one is not easy, and while you are grieving, you might be unsure what you will do with the money you will receive. But this money will give you some peace of mind, knowing that you can continue to take care of your family.
If you’re looking for a policy for yourself and are not sure which policy is right for you, the best way to find the right life insurance policy for you and your specific needs is by working with an agent who specializes in life insurance. We have provided the top life insurance companies in the nation below; each offers hassle-free assistance and the most competitive rates. Always check multiple sites to make sure you have bargaining power and know the advantages of each company. Make sure a hard time isn’t made harder by a financial burden, check life insurance rates today.