Does Life Insurance Pay Debts? 
Life insurance can be used to pay debts , final expenses , pay for college , whatever you want it to cover . It just depends on why you took out the policy , who the beneficiary is , what the beneficiary wants to do with the money etc. . It generally will not automatically pay the debt unless the credit holder is the named beneficiary . Life insurance proceeds are protected from probate and creditors unless the estate is the named beneficiary . 