After finishing the first file opening last week in Box 2 of our important documents, we are ready to begin the second opening which begins the second category, life insurance.
In my filing system, I have dedicated three openings (slots 2 -4) for life insurance:
Slot 2: Paul’s policies – Head of Household
Slot 3: Tracy’s policies – Spouse
Slot 4: Children’s policy – Children
Your file will differ from mine. Remember, I am sharing my file to give you an example of setting up a filing system. The important part is to appoint one file opening per person. This arrangement will keep the documents organized. In my system, the second file opening holds all life insurance policies for my husband, the head of our household.
Head of Household
We carry three types of policies for Paul:
- Part 1 – Term Life Insurance
- Part 2 – Combination whole life and long-term care
- Part 3 – Accidental death insurance
Term Life Insurance Policy
The bulk of our insurance is held in term life insurance. Having used Suze Orman’s recommendation, we purchased our term life insurance policies through SelectQuote. This company researches the available options and handles your process from start to finish. I have found this company very helpful in securing our term life insurance policies.
Behind the summary page, I keep the following documents on Paul’s term life insurance policy:
1. Receipts or billing notices indicating the date, payment amount, and payment type. With this term life insurance, we pay an annual premium for the life of the term. To prove the annual payment, I keep these receipts.
2. Beneficiary Changes and Notifications. Any correspondence from the insurance company regarding the beneficiary designations resides behind the payment receipts.
3. Policy Changes. Our insurance company extended the term of our policy by a week due to a processing delay. This information is kept behind the beneficiary notifications.
4. Policy. This 20+ page document is our contract with the insurance company of how, what, where, when, and how much they will pay in the event Paul passes away. (I know this information is not easy to process because you are preparing for the worst. However, time spent now will ease your stress level should you need these documents.)
5. Additional Correspondence. The last items in the bundle of term life insurance for Paul are the application, copy of first payment, and notes from Select Quote conversations.
Placed together, these items are paper clipped. These items are the first of three bundles housed in the second file opening of Box 2.
Annually reviewing your important documents is easier when the paperwork is housed together, assigned a designated place, placed in that designated space, and you remember the designated place. 🙂 Keep using time wisely as you organize your important documents!
Question: When was the last time you reviewed your beneficiary notifications? Please add your answer to the comments.