The death of someone you love is one of the most stressful experiences anyone can go through.
No amount of money can even come close to replacing a human life, but I’ve seen how financially devastating it is when someone dies without life insurance. It’s not a pretty picture.
It’s critical to figure out the best way to manage the money that is left to you by the deceased.
A study performed in 2014 found that the average insured family spends the entire death benefit within three years. Careful planning and a little discipline can help avoid running out of money too soon.
Each situation is unique. Your family size, income, short- and long-term goals, the face amount of the life insurance policy, etc., will help to shape the plan you come up with.
The purpose of this article isn’t to provide in-depth investment advice. You may want to speak with your financial advisor before making any big decisions. That being said, I am a Certified Financial Planner (CFP) and a Chartered Financial Consultant (ChFC), so this is familiar territory for me.
Depending on the specifics, there are three ways I’d recommend my clients “invest” their death benefit:
- Annuitize the Benefit
For some people, it makes sense to spread the money out over a longer period of time instead of taking a single lump-sum payment. For those people, annuitizing the benefit is a terrific option.
You can structure the payments so you receive a check every month for a specified period of time, or you can receive payments for the rest of your life, guaranteed. Watch the short video below to find out more:
I often suggest this option for people who are looking for guaranteed income and safe, predictable growth no matter how crazy the economy gets.
Since this is such a big topic, I’m going to split this post into two parts. Stay tuned for the second installment!
Happy New Year!