How to Get Out of Debt With the Get Out of Debt Guy » life insurance benefits http://getoutofdebt.org Free debt help and debt advice on how to get out of debt, getting out of debt consolidation scams, and inside information on the debt relief and debt help industry. Sat, 26 May 2012 00:15:05 +0000 hourly 1 http://wordpress.org/?v=3.3.2 Will My Family Have to Pay My Debts From My Life Insurance After My Death? – John http://getoutofdebt.org/7324/will-my-family-have-to-pay-my-debts-from-my-life-insurance-after-my-death-john http://getoutofdebt.org/7324/will-my-family-have-to-pay-my-debts-from-my-life-insurance-after-my-death-john#comments Mon, 19 Apr 2010 12:13:04 +0000 Steve Rhode http://getoutofdebt.org/?p=7324

From How to Get Out of Debt

“Dear Steve, I have $152,000 in student loan principal, down from $163,000 after 6 years of payment. $77,000 are at a fixed rate of 2.625%. $6000 are at 5% fixed, and $69,000 are at a variable rate, which currently averages 2.5%. I also have $22,000 in credit card debt, which is at fixed rates of [...]

Read the full article at GetOutOfDebt.org, click here: Will My Family Have to Pay My Debts From My Life Insurance After My Death? – John

]]> From How to Get Out of Debt

“Dear Steve,

I have $152,000 in student loan principal, down from $163,000 after 6 years of payment. $77,000 are at a fixed rate of 2.625%. $6000 are at 5% fixed, and $69,000 are at a variable rate, which currently averages 2.5%.

I also have $22,000 in credit card debt, which is at fixed rates of 4.99%, 3.99%, and 2.99%. The average rate on the 3 cards is around 3.75%.

My monthly payments are interest only on the student loans at $410 per month and my credit card issuers want me to pay 2% of balance plus interest, so the payments are about $470 per month.

I rent for $600 per month.

My car is 22 years old.

My income is $44,000 per year, working one FT and one PT job.

Will my family have to pay any of my debt from the proceeds of my life insurance after my death?

John”

The Answer:

 

Dear John,

Upon your demise creditors can only look to your estate, your part of assets for repayment of debt. The life insurance proceeds are a benefit to the beneficiary, just like a 401(k) is, so it is not part of your estate.

It also depends if the debt is a joint obligation with a surviving family member or spouse. That agreement lives past your death.

In the community property states of Alaska, Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin, the liability of debt after death is more complicated. These are community property states. If you live in one of these states you should speak to a lawyer licensed in your state for specific advice.

Big Hug!

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Read the full article at GetOutOfDebt.org, click here: Will My Family Have to Pay My Debts From My Life Insurance After My Death? – John

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