How Should I Use Deceased Spouse's Life Insurance?
The loss of a spouse brings overwhelming emotions and financial stress. Life insurance death benefits can help surviving spouses manage this transition without immediate financial worry. Life insurance is one thing that was put in place to allow those remaining to process their loss without fretting over their finances.
Claiming Life Insurance Benefits
Death benefits typically arrive within 30 days of submitting a claim. You will need a certified death certificate (usually available within a week from the funeral home). Experts recommend ordering approximately 15 copies for closing various accounts and settling estates.
Recommended Uses for Life Insurance Proceeds
Funeral Costs
Use the benefit to cover funeral expenses, reducing financial strain during an already difficult time.
Ongoing Living Expenses
Household income typically drops about 40% after a spouse’s death due to changes in Social Security, retirement income, and lost earnings. Life insurance can help cover mortgage, car payments, utilities, food, clothing, and health insurance premiums.
Debt Management
Generally, you are not personally responsible for debts in your spouse’s name alone. However, you may be liable for jointly-held debt or loans you co-signed. Consult an elder law attorney to understand your state’s specific laws regarding spousal debt obligations.
Emergency Fund
Build a liquid emergency fund covering three to six months of expenses using death benefits.
Retirement Security
Widows face heightened poverty risk. Typically, people need 80% of pre-retirement income to live comfortably in retirement.
Education
Young widows may use proceeds to return to school or fund children’s college education – but only after securing retirement savings.
If you have lost a spouse and need guidance on managing life insurance proceeds and estate matters, contact The Stegall Law Firm. We can help you navigate this difficult time with sound legal and financial planning.
