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Many people in Memphis, TN, obtain life insurance to ensure their loved ones are taken care of after they die. The death benefit can cover funeral expenses if the person did not plan and prepay for their own funeral. Beneficiaries often receive a check, or the money is placed in an account they have immediate access to. However, it doesn’t take long for creditors to start calling the family about paying back medical bills.
The Benefit Is Not Part of The Estate
It’s crucial to understand how the estate works after a person dies. The estate involves everything the person owns, which is often sold to satisfy previous debts. This can include medical bills that have gone to collections and credit card debt. The estate takes care of the previous debt.
The death benefit people receive from a life insurance policy through Anthony Lancaster Insurance, Inc is not part of the estate. This means that it doesn’t automatically go to creditors or to pay past-due medical bills. Instead, the money is the property of the beneficiary, so they can do with it as they please.
Who’s Responsible for the Medical Bills?
Family members are usually not responsible for medical bills after a loved one dies, even if they receive a substantial death benefit from a policy. The estate is responsible. In some situations, the spouse may be held liable for bills. Anyone who is a coowner of an account, such as a credit card account, will be responsible for that account. If the estate is insufficient to cover medical expenses, and there is no spouse, the medical bills can be written off.
It’s important to understand how life insurance payouts work before creditors try to hustle you out of your money. Agents here at Anthony Lancaster Insurance, Inc can help you learn more. We’re currently serving the Memphis, TN, area.
