Does Life Insurance Have To Be Used To Pay A Deceased Person’S Bills?

  1. 11783 POINTS
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    Larry GilmorePRO
    Agent Owner, Gilmore Insurance Services, Marysville, Washington State
    Does life insurance have to be used to pay a deceased person's bills?  Only if required by the courts or as stated in the beneficiary declarations.  Usually the beneficiary can do what ever they choose to do with the proceeds from a death benefit check. It's then up to the beneficary at that point.
    Answered on June 5, 2013
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  2. 63333 POINTS
    Peggy Mace
    Most of the U.S.
    Life insurance does not have to be used to pay a deceased person's bills if the beneficiary is a person. If the beneficiary is the deceased person's estate, the life insurance proceeds will most likely go through probate, at which time they become a target for bill collectors. Also, if the policy proceeds are assigned to a funeral home or other lender, these institutions are able to take their share of the policy proceeds first.
    Answered on June 6, 2013
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