Business & Finance

If I am the beneficiary of life insurance payment after someone dies, do I have to by law use that money to pay off the deceased debts? Or is this something that the bill collectors cannot touch at least legally? How would the creditors even know that there was a payout of life insurance? Anyway for them to know this? Can I get in trouble for not paying?

I am not certain ......but in this case I would assume the only way you would be liable for the deceased persons debts is if you co-signed when these debts were incurred.

No. You are not responsible for the debts unless you are a coborrower or cosigner for them. Insurance benefits are payable directly to you and can be used as you see fit. Some creditors may try to get you to pay, but they have no legal means to compel.

you are probably listed as the deceased relative and bill collectors will go after anyone in the family they could possibly get the money from especially if they find out(and they can) that there was life insurance
bill collectors will attempt to find out anything they can about the estate of the deceased to get payment

unless you cosigned for any of it nope only the dead persons estate is responsible

They cannot go after any assets of yours or sue you directly unless they can prove you took money out of the estate.

but of course you should ask a attorney , not yahoo answers

There are certain loans and debts that cancelled upon someone's death...like most federal student loans.

However, mortgages, auto-loans, and credit cards are often covered by either the deceased's estate or the insurance policy prior to being dispursed to the beneficiary.

I suggest getting a lawyer to aid in the paperwork and obligations that go along with being a beneficiary. Try this site to find the best life insurance

http://free-lifequote-usa.blogspot.com/

Here you can get quotes from different life insurance companies in your area, its the best way to find an affordable life insurance with a reliable company.

No. Unless the beneficiary is a trust or the estate of the deceased, the beneficiary can use the money any flipping way they want to. The bill collectors for the deceased can't touch it. Creditors don't know it's there, unless someone tells them. It's private information.