It’s vital to spend life insurance payouts wisely, especially if you intend to use the lump-sum benefit to ensure your family’s financial future. It’s fairly uncommon to find oneself overspending, especially when there’s no prior plan for the money. Since life insurance payments are meant to help you financially after the death of a loved one, it’s essential to do a lot of research and planning ahead of time to invest the money properly. How to Invest a Lump-Sum Payment from a Life Insurance Policy? Life insurance aims to leave behind a specified amount of money to your loved ones to keep them afloat when you’re no more. When you die, the benefit is paid to the person or people you chose as your beneficiaries. The life insurance payout may be made in a lump sum or smaller installments depending on the policy’s terms. A lump-sum payment is the most prevalent type of life insurance payout. Most insurance providers make this the default option, which means your beneficiaries will get a single cash payment for the full death benefit they are entitled to. Here are some ways you might put a life insurance benefit to working for you in the future. Invest in education A life insurance policy payout can be used to pay for a child’s education, whether at a private elementary school, high school, or college. Using the death benefit to pay for your children’s schooling could save them money in the long term. Repay your debts Many people use the lump-sum payment from their life insurance policy to pay off debts ranging from medical bills to student loans, mortgages, and credit card debts. Purchase Annuities An annuity is comparable to a life insurance policy in that it can be purchased. If your beneficiaries reinvest the lump-sum death benefit in an annuity, future generations will pass the money down. Annuities can supplement your spouse’s income during retirement or pay for your children’s future needs. You can also choose to have the death benefit paid as an annuity. In that case, the payment will be made in increments during the beneficiary’s life rather than all at once. Buy Stocks The annuity payment can be invested in equities and mutual funds to earn dividends and capital gains. Life insurance contracts allow individuals to transfer their payout to stocks directly and invest. After receiving the distribution, your beneficiaries can choose to invest it in stocks themselves. Invest in Bonds You can buy bonds with a lump-sum settlement from a life insurance policy. Bonds are attractive investments because they pay interest and are backed by a company or a municipality. NFTs and Cryptocurrency Investing in non-fungible tokens (NFTs) and cryptocurrencies works like many other investments. You purchase the cryptocurrency or NFT and sell it for a profit at a higher price than when you purchased it. There are many crypto projects to invest in, and opening a cryptocurrency brokerage account is now simpler than ever. Real Estate Purchase The lump-sum payout can be used to make real estate investments, such as purchasing an apartment complex, renting a home to tenants, or operating a strip mall. You can make money from rent and sell the property at a higher price later. Crowdfunding Anyone can now raise funds for nearly any project through crowdfunding websites. You can put your life insurance policy’s death benefit into crowdfunding and earn a portion of the business you’re supporting. The Benefits of Investing in Life Insurance Payments
- Generate future income: While getting a life insurance policy will benefit your loved ones in the future, investing in the benefits can help you accumulate even more wealth for future generations.
- Get out of debt: If you use the policy payout to pay off your bills, your loved ones will be free from debt, which will take a lot of stress off their shoulders. Paying off debt with a life insurance payout also frees up funds that can be invested in assets once the loan is paid off.
- Better credit score: Paying off debts improves your credit score.
Contact Information:
Email: [email protected]
Phone: 8139269909
Bio:
For over 30-years Flavio “Joe” Carreno of The Retirement Advantage has been a Federal Employee Retirement System specialist (FERS) as well as a Florida Retirement System specialist (FRS) independent advocate. An affiliate of PSRE (Public Sector Retirement Educators), a Federal Contractor & Registered Vendor to the Federal Government, also an affiliate of TSP Withdrawal Consultants. We will help you understand your FERS & FRS Benefits, TSP & Florida D.R.O.P. withdrawal options in detail while recognizing & maximizing all concurrent alternatives available.Our primary goal is to guide you into retirement with no regrets; safe, predictable, stable, for life. We look forward to visiting with you.
Disclosure:
Not affiliated with the U.S. Federal Government, the State of Florida, or any government agency. The firm is not engaged in the practice of law or accounting. Always consult an attorney or tax professional regarding your specific legal or tax situation. Although we make great efforts to ensure the accuracy of the information contained herein we cannot guarantee all information is correct. Any comments regarding guarantees, safe and secure investments & guaranteed income streams or similar refer only to fixed insurance and annuity products. Fixed insurance and annuity product guarantees are subject to the claimsâ€paying ability of the issuing company. Annuities are long-term products of the insurance industry designed for retirement income. They contain some limitations, including possible withdrawal charges and a market value adjustment that could affect contract values. Annuities are not FDIC insured.
