Things to Consider After You Receive a Life Insurance Payout

It’s important to use your payout wisely so you and your dependents are set up for the future. Here are a few ideas to help you make informed decisions with the benefit you receive.

TAKE YOUR TIME

When you’re grieving, you may not be thinking straight. Making big financial decisions at this time could be risky. Unless you have immediate needs to cover, it may be a good idea to allow some time to pass. That way, you can do your research and plan how you can best use the money.

REPLACE LOST INCOME

If the departed was the main breadwinner in your household, the payout could help you keep up with regular expenses such as mortgage repayments, food, utilities, school fees and other daily living costs. Consider reviewing these expenses to help set a budget.

PAY OFF YOUR DEBTS

High-interest debts (especially non tax deductible loans) can erode your income and savings over time. If you have the money to spare from your benefit payout, it might be worth clearing debts such as credit card balances or personal loans to ease the financial pressure.

BULK UP YOUR EMERGENCY FUND

It’s generally a good idea to have 3-6 months’ worth of salary in an emergency fund so that if anything happens to you, your household can keep going. A life insurance benefit may provide a good opportunity for you to bulk up this account and create a financial buffer for unexpected expenses or loss of income.

CONSIDER YOUR FUTURE

Could your superannuation fund do with a top-up? Do you have children wanting to study further or elderly parents you’ll need to care for? This may be a good moment to determine what funds you will need to help you and your loved ones live comfortably into the future, and to set aside some of your benefit for these expenses.

INVEST YOUR BENEFIT

To earn compound interest on your lump sum, it may be worth investing leftover funds into a diversified portfolio. If you choose to go this route, it’s important to speak to an expert who can guide you in making smart investments.

Whatever your lifestyle and needs are, a Financial Adviser can help you create a plan for your benefit that will help you use it to your best advantage. They can also help you put financial protections in place to ensure your present and future are financially secure.

Making thoughtful choices now can protect both today’s lifestyle and tomorrow’s security.
Book a free 15-minute call to explore how a tailored plan can help make the most of a benefit payout.

Your Vision Financial Solutions Pty Ltd ABN 64 650 296 478 and its Advisers are Authorised Representatives of Fortnum Private Wealth Ltd ABN 54 139 889 535 AFSL 357306. This article has been prepared without taking into account your personal objectives, financial situation or needs. Before acting on any information on this article you should consider the appropriateness of the information having regard to your objectives, financial situation and needs.