This verse has proved of great comfort to many a sorrowing believer who has just lost a loved one. Especially if they know that the parent or child or friend was also a believer in the saving work and person of Christ, then--although they sorrow--they "sorrow not, even as others which have no hope" (1 Thessalonians 4:13).
For that loved one, though no longer in that old body which had perhaps been filled with pain, is now with the Lord. That is, he or she has been given a somewhat indescribable spiritual body in which to function in heaven until the coming resurrection day. Although that may not yet be the wonderful life that awaits them in their glorified, resurrection bodies in the ages to come, they will be "with Christ; which is far better" than this present life (Philippians 1:23).
There are a number of sincere believers who argue that dead Christians will simply "sleep" until He comes again to raise the dead. While a certain case can be developed for this "soulsleep" concept, it is hard to see how that could be "far better" than this present life. Paul said that he had a "desire to depart, and to be with Christ" and also that "to me to live is Christ, and to die is gain" (Philippians 1:23, 21). But what "gain" could there be for him in simply "sleeping" instead of continuing to live in Christ?
The Scriptures do not reveal much about that "intermediate state," as it has been called. But there is that intriguing verse about being "compassed about with so great a cloud of witnesses" who perhaps are somehow watching us as we "run with patience the race that is set before us" here on earth (Hebrews 12:1). That possibility can be a real incentive to do just that. HMM