It’s by no means easy to lose a loved one, but if they had a life insurance plan that just paid out to you recently, their legacy of caring for you even when they’ve passed can help you move forward in your life. But how do you move forward? What do you do with life insurance money once it’s been given to you?

Below, we offer some suggestions for how you could use the funds for you and those you care about.

Find Out How the Funds Will Be Given to You or Choose an Option

Depending on the circumstances, life insurance can be given out as a lump sum or as an annuity. If given the option of choosing which one, there are pros and cons to each choice.

If given as a lump sum, you’ll have a (likely) substantial amount of money given to you which is generally not considered taxable income. This can be one of the best options, but being given so much money can be overwhelming for some people and make it easy to spend it when you should be saving it.

Conversely, being given a life insurance payout as an annuity will essentially mean an additional income stream to your bank account each month as a smaller (but consistent) amount of money, but it could also be taxed depending on the situation.

What to Do With Life Insurance Money: Get a Certified Financial Planner

Whatever ends up happening when you decide how to receive a life insurance payout, you should book an appointment with a financial expert as soon as possible. A certified financial planner will help you explore what goals you want to achieve in addition to helping you balance those with any debt you may have as well.

It’s important to book this appointment right away though. Not focusing on this until after you’ve already spent most of the money will leave you with fewer options to help you accomplish your goals.

Purchase Key Items That Significantly Elevate Your Quality of Life

To be clear, this is not an encouragement to buy a new TV or a full suite of brand new kitchen appliances—we’re referring to the larger purchases that affect how you live.

Has your family grown to a point where space feels cramped? Consider using some of your payout to buy a larger home. What about major surgery or health items that were previously out of reach because they were too expensive? Maybe money has prevented you from taking a better-paying job offer in a region you couldn’t afford to move to previously? These kinds of purchases can now be considered with your additional funds.

You always deserve to have a life worth living, after all.

Consider Setting Up a Legacy Piece for Them

If you’re already comfortably well off and can provide for those in your life that need it, or even if you just want others to understand the contribution the person who passed made to others in the community, you can honour them another way.

Depending on the value of your life insurance payout, you could set up legacy pieces that help others. This could be as simple as donating an ornate bench at a park they frequented, or as large as setting up a non-profit organization in their name.

With money comes opportunity, so how you spend it ultimately depends on what opportunities in your life you’d like to capitalize on and continue moving forward with in the best way possible.

Need help finding the right life insurance policy to protect those you care about and offer a sizeable payout? Contact us today!