By Wes Lind, Life Quotes, Inc.

Imagine if you or another income-earning family members die with one or multiple unpaid debts. Many personal debt agreements specify that a remaining balance becomes due upon death.

Americans in credit debt

The average credit card debt per household was $15,788 in 2009, according to the Federal Reserve G.19 report on consumer credit in May 2010. While total U.S. Consumer revolving debt decreased to $866 billion in 2009 from $958 billion in 2008, 98 percent of that debt was the result of credit cards. 

These payments won’t just disappear and will become the responsibility of any survivors to pay off if there is a lack of proper planning. Luckily, most life insurance policies provide the immediate and necessary cash to cover any outstanding debts.

Other types of debt won’t necessarily be payable upon you or another family member’s death, according to Edward E. Graves, author of “McGill’s Life Insurance.” For example,  if both you and your wife are liable for a debt and pass away, the right amount of life insurance gives any surviving family members the option to pay off the debt all at once or in its scheduled intervals.