1. 5082 POINTS
    J Paul Wilson CFP, CHFC
    Certified Financial Planner, JPW Insurance Retirement Investments, Halifax, Nova Scotia, Canada
    It is very important to manage the life insurance payout carefully. You have a lump sum of money and it may have to last a lifetime. What you do specifically depends on your individual situation. You may want to work with a financial planner.

    The first step would be to do a budget and cash flow projections understand your current situation.

    If you have further questions, or feel that I could be of assistance, please do not hesitate to contact me.

    If you would like to work with a local life insurance broker, you could start with a Google search. For example, if you search for: life insurance broker Halifax or life insurance agent Halifax, my name, along with several others, will come up. You can use the same method to find a life insurance broker in your community.
    Answered on May 22, 2014
  2. 11498 POINTS
    Jason Goldenzweig
    Co-Founder, TermInsuranceBrokers.com, Goldenzweig Financial Group, Las Vegas, Nevada
    The proceeds from a life insurance payment can be used in any way the beneficiary sees fit. Many people will put it into their checking account, a savings account, buy a life insurance policy on themselves, invest some of it (e.g. retirement accounts, stock market, etc.), spend some of it (i.e. paying off bills, funeral expenses, down payment on a house, etc.).

    A SPIA can be a great option to consider as well. SPIAs are offering about 6-7% interest on the funds right now and guarantee you an income stream for the rest of your life.

    The amount of the payout can be a factor in determining what may be most advantageous for you. If someone has a $50,000 payout, they may consider just putting it in their bank account or paying off debts. Someone with a $1,000,000 payout may decide to diversify the money's usage by putting a portion away, pay off some debts, invest some it, and create an annuity.

    It's helpful to consult with a financial advisor when trying to create a good course of action. Keep in mind though, a financial advisor/planner will likely have fees that they charge for their management of the funds.

    Please feel free to contact me for help. As an experienced insurance broker, I've helped many clients who have had a claim figure out a good course of action for the use of the funds and I do not charge any fees for my services - as an insurance broker, I'm compensated by the insurance company for sales of policies, I do not charge fees for my input. Thanks very much.
    Answered on May 22, 2014
  3. 37376 POINTS
    David G. Pipes, CLU®, RICP®
    Business Development Officer, T.D. McNeil Insurance Services, Fresno, California
    Recognize that the proceeds are yours and that you are not obligated to pay debts owed by the decedent.  Eliminating your debt is the first order of business.  The remainder can accumulate or be invested unless it is necessary for income.  You might find that an immediate annuity can transform the balance into a monthly income that you cannot outlive.  That might be appropriate.
    Answered on May 22, 2014
  4. 63333 POINTS
    Peggy Mace
    Most of the U.S.
    Some things to do with a life insurance payout:
    1) Pay for the funeral.
    2) Settle the estate of the deceased.
    3) Buy life insurance for yourself.
    4) Pay off debts.
    5) Pay off your mortgage (unless the interest rate is so low that it makes more sense to keep it) 
    6) Take the remainder of the life insurance proceeds in regular payments so that you have regular income and earn interest on the remaining lump sum.
    7) Purchase an annuity with the remaining death benefit.
    8) Invest the money in whatever you desire.
    9) Hire services, visit family, or "pamper" yourselves in other ways to help you get through the shock of your loss.
    10) Give some of the money to charity or family in memory of your loved one.
    Answered on May 23, 2014
  5. 14231 POINTS
    Tom Sheehan
    Agency Owner, The Thomas G Sheehan Agency, 27 Glen Road Sandy Hook, CT 06482
    If you are the beneficiary of someone's Life Insurance then they recognized you to be a very special person in their life.  If you were a business partner, then it may be possible that you two set up a cross sell plan to provide for the smooth transition of your business. In that case, that was the intent of the policy.  Your spouse may have bought the policy to make sure that you were able to keep you family in your home without financial stress.  It is ultimately up to you what you do with the money.
    Answered on May 23, 2014
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