Does the beneficiary have to pay bills left by the insured?

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Asked June 22, 2010

1 Answer


The basic answer to this question is that the beneficiary is no responsible for paying any debts that are owed by the deceased party. The beneficiary does not have any obligation towards the debt of the deceased unless those debts are also linked to the beneficiary. However, there are cases where it is either required or reasonably expected that those bills are paid.

If the beneficiary is named on any of the deceased debts as a principle party, then the debt transfers to the beneficiary upon the death of the deceased. This really has nothing to do with the life insurance policy itself, and that debt would transfer even if there were no insurance policy to pay it with.

In some cases, the deceased may have specified how the insurance money should be used, including paying off outstanding debts. In this case, the beneficiary may not be able to make a claim against the will until such other obligations have been taken care of.

In some cases, such as where the beneficiary is living in the home of the deceased and there is an outstanding balance on the mortgage, it is in the best interests of the beneficiary to apply the insurance money to the mortgage, paying it off. This instance is not so much as an obligation to pay the bills of the deceased, but is actually an acceptance of the beneficiary to handle the necessary bills to keep the estate maintained.

Answered June 22, 2010 by Anonymous

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