Can Life Insurance Be Used To Pay Off Debt?
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63333 POINTSview profilePeggy MaceMost of the U.S.Yes, life insurance can be used to pay off debt. Many people buy life insurance to pay off their mortgage, school loans, or other debt if they were to pass away before the debt was repaid. However, the beneficiary of a life insurance policy is free to use the death benefit for other purposes, as well.Answered on October 28, 2013flag this answer
37376 POINTSview profileDavid G. Pipes, CLU®, RICP®Business Development Officer, T.D. McNeil Insurance Services, Fresno, CaliforniaRetiring debts is often the motivation for purchasing life insurance. Often a lender will require that a life insurance policy name them as a loss payee to make sure that the debt is paid should the person die. The cash value of the life insurance policy can often retire a debt. Although no longer a popular concept, using a whole life policy y to provide the protection for a mortgage results in a cash accumulation that can pay off a mortgage well in advance of its completion, saving a great deal of money.Answered on August 25, 2014flag this answer
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