Though I would not normally invest in a life insurance policy for our children, Paul and I do have one life insurance policy that covers all three of our children.

For us, the purpose of life insurance is to cover our family expenses after our deaths. Our children would not leave any debts or responsibilities, so we choose not to carry policies for each of our children.

The one policy we carry is a group policy through Paul’s employer. The cost is less than $3 per month and holds coverage for $15,000. For the inexpensive price of this coverage, we have chosen to carry this insurance for our children.

Housed in the fourth file opening of Box 2 of our important documents, the life insurance documentation for our children’s policy includes the summary page and information page.

Summary Page

This summary page has the contact information for the benefits administrator, benefits identification number, and employee number. Click here for more details about this summary page that I keep at the front of each file opening to make access quick and efficient.

Information Page

To make a claim, we must contact the benefits administrator at my husband’s office. The benefits administrator works with the provider directly. Therefore, we do not hold a paper copy of this policy.

In setting up this file, I contacted the benefits administrator and requested a detailed explanation of where, when, and how to send a claim. I typed that information creating an information page. In the awful event that we need to file a claim, Paul or I will get this document and follow the steps.

Tracy’s Tip: Waiting until tragedy strikes to get this information will add anxiety and stress during your time of grief. Researching now and writing down the instructions will save you time, energy, and stress in the future.

The information page includes:

• How to Make a Claim
• How the Payment is Dispersed

These two documents complete the fourth file opening and the second category – life insurance. As my children grow, we may decide to carry policies for each of them. If and when that time comes, I will place those policies in this file opening.

You may need more file openings for your insurance documents. If you carry policies for your children or parents, then you may need a file slot for each person. Keeping your file organized by either insurance type (term, long-term, accidental, etc.) or by person (Dad, Mom, Child #1, etc.) will help you in using time wisely to reach those documents.

This process is a marathon. I worked for 3-4 months exclusively on these files when I set them up. At that point, I was a stay-at-home wife and had the time to invest in organizing and researching the information. If I were setting up my file now, then it might take a few years. With three little ones, spending time training them is a top priority.

If you struggle with organizing your paperwork, then consider your schedule. I pay/schedule bills twice a month. During this time, I am near my important documents and spend 15 minutes filing, organizing, and updating my files. Find a time when you are already near those documents. Planning to organize is one step closer to executing your goal. Happy organizing!

Question:  When are near your important documents, what are you doing?

As you organize your important documents, remember to adjust your file to your needs. In sharing a way to organize, I use my file as a guide.

If there is only one adult in your household, then you will only need one file opening. However, if your family has more than two adults, then you will need more file slots to house those documents.

My system works for me which may or may not work for you. Feel free to copy my file while choosing an organizing pattern that fits you and your family’s needs.

In our life insurance category, I have allotted three file openings to house these documents. My husband’s policies go in the first slot, my records in the second, and our children’s documents in the third pocket. Working with my policies, I have three bundles: term life insurance, combination life and long-term care, and accidental death.

Accidental Death Insurance

Just this week I received notification that one of my accidental death insurance policies has changed carriers. Our credit union chose to move from one provider to another, and the letter of this change arrived on my desk this week.

Accepting the Free Coverage

Since I already have the free-to-me base coverage, my policy will continue, but I must name my beneficiaries.

Choosing your Beneficiary

Per this letter, I must contact the new company in writing with my beneficiary designations. I plan to send my primary and contingent beneficiary designations to this new company pronto.

My choice is one primary and two contingent beneficiaries. In this way, I am offering the insurance company multiple ways to get the policy distribution to my family.

Documents Kept Safe

This policy along with two others, provided through our credit unions and credit card company, include the following documents:

• Certificate of Insurance,
• Correspondence from Provider, and
• Beneficiary Designations

Each set of policy documents is paper clipped together. Then these three sets are paper clipped and housed behind my combination whole life and long-term care insurance documents. All these items are then placed in the third file opening of Box 2, holding our important insurance documentation.

This third bundle of documents completes the third file opening. Woo hoo! Making progress is exciting as we get organized while using time wisely. Designating a home for your paperwork and labeling your categories makes retrieving those documents quick and easy.

Using time now to organize and create a space for your important documents will save you money from replacing missing papers, energy from sorting through piles of paper, and time from searching for that special place you put it, so you wouldn’t forget it. 🙂

If you are struggling to schedule time organizing your documents, plan to work for 10 minutes when you pay/schedule your bills for the month. Try to schedule a time when you are naturally located where most of your important documents are in reach.

Just take it one document at a time. This project does not need completion today, this month, or this year. A little here and a little there will get you further than rearranging the piles. Start where you are, and happy organizing!

Question: What obstacle prevents you from organizing your important documents? 

Last week I began explaining my life insurance policies, consisting of three bundles kept in the third file opening of Box 2 of our important documents.

In Part 1, I shared the paperwork associated with my term life insurance policy. These items are paper clipped together in the first bundle.

The second bundle is my combination life insurance and long-term care insurance policy.

Combination Life Insurance and Long-term Care Insurance Policy

Just like Paul’s policy, this combination insurance operates as an extra life insurance policy. If I need in-home care, then I can act on the long-term care benefits of this policy. Currently, this policy has a low overall value. However, we choose to slowly increase the value at each annual or open enrollment. By adjusting slowly, we increase our coverage without a significant increase in cost.

This policy obtained through Paul’s work belongs to me. If Paul leaves his job, we will lose the payroll deduction benefit, and pay the premiums directly to our insurance provider. Knowing that we own this policy, we choose to invest in our future without reservation because a job change will not cancel these benefits.

The documents kept in this bundle include the following:

1. Change notifications. Choosing to automatically increase the value each year, we receive notification of the new premium amount, new face value, and the date of the change. These documents are kept in my file near the policy.

2. Endorsements. Confirmation of additions or changes of riders on the policy is given via an endorsement notice. Occasionally, the insurance company offers new riders to existing customers. If we choose to add these riders (e.g., accidental death benefit, accelerated death rider, EZ value benefit rider, etc.), then the insurance company will check the request. Once approved, I will get a letter listing the changes and effective dates. These notices are kept together near the policy for verification of coverage.

3. Beneficiary Designations. Documentation verifying my beneficiary designations and any changes made to those designations stay in the file with the policy.

4. Policy. This multi-paged document, detailing the insurance contract, stays in this file.

5. Application for insurance. Though this group policy did not require a physical exam, I answered some general health questions with my application during an annual or open enrollment session. After completing the electronic application, we retained a copy.

The application information went to the insurance company, and coverage  began after approval. Though my policy is active, I choose to keep the application documentation in this file.

Paper clipped together, these documents stay behind the term life insurance documentation bundle in this third file opening.

Though this combination policy seems insignificant now, it can save our financial future. Long-term care policies are very expensive, but locking in at a young age will save money in the long run. As our policy value and premium slowly increase each year, we hope to have comfortable coverage in our old age.

After researching and obtaining these insurance policies, I keep them safe within my filing system. As you discover a system that works for you, keep it current. In the event you need these items, you will want to have accurate information that is easily accessible. Keep up the great organizing!

Question: What types of life insurance policies do you find beneficial for your family?

Slow, steady, and consistently organizing those important documents will get your paper piles organized and easily accessible.

Concentrating on this second box of important documents, our personal insurance documents fill the first file opening in our accordion filing system.

The second slot holds the head of household life insurance documentation.

Having completed the second file opening last week, let’s focus on the third opening which has life insurance policies for the head of household’s spouse.

If you are a single-parent with an adult child with his own insurance, you can place his life insurance in this next file slot. Remember to adjust the filing system to work for you. 🙂

In my filing system, this third slot holds my life insurance documents. Like Paul, I also have three types of life insurance:

Term – Part 1

Combination whole life and long-term care – Part 2

Accidental death insurance – Part 3

Term Life Insurance Policy

Realizing the pros and cons of term life insurance, Paul and I decided that term insurance met our family’s needs. The premium price fit our budget, and the policies have served us well.

With our original 10-year terms coming to an end in the next couple of years, we are planning to replace these policies with new 20-year terms. Yes, this is a significant increase in our annual premium, but the term will extend through our children’s childhood.

Using SelectQuote, I chose my term life insurance policy. In replacing our current policies, we are again working through SelectQuote. Impressed by the service, detail, and accuracy of information, I found our agents helpful in securing our term life insurance policies, and I look forward to working with them again.

In this file opening, I keep these documents about my term life insurance policy:

1. Summary Page. This summary page indicates the policy number, insurance company, contact information, beneficiary information, and website access information and passwords.

2. Receipts. Each year I receive a premium notice with the policy number and amount due. After paying the premium, I note the date, amount, and payment type. I then keep each year’s notice as proof of payment for the life of the term. If there were a question about the policy cost, I will have proof of our payments.

3. Privacy Policy. When my insurance company merged with another company, the privacy policies changed. I keep the new privacy policy notice with the policy for future reference.

4. Merger Documentation. Since my policy was with the first insurance company and that company merged with another, I keep all merger letters and endorsements for the life of the term.

5. Beneficiary Changes and Notifications. When our lawyer completed our estate planning documents, he handled the beneficiary notices for our life insurance policies. To protect my family, I have chosen primary and contingent beneficiaries. These notices stay in this file.

6. Policy. This booklet details my contract with the insurance company including how, what, where, when, and how much they will disperse the policy amount to my family in the event I pass away. Having all these details nailed down now will cut the amount of stress on my family after my death.

7. Additional Correspondence. The last items in this bundle are the application, copy of first payment, and notes from SelectQuote conversations.

Placing these items in order, I paper clipped them together. These items are the first of three bundles housed in the third file opening of Box 2. Keeping these documents together with the other insurance documents saves me energy and time.

In using time wisely to support these files, I check these documents annual to protect my family. Your important documents are more than just paperwork. They are your family’s protection, and spending time to get organized will save them money, energy, and time. Keep organizing!

Question: What type of insurance have you chosen to protect your family? Please add your answer to the comments.

This week was odd. In many ways I felt like I was just treading water. My head was above the water without any danger, but I was not making progress.

Though I did get some purging, cleaning, and organizing accomplished, other priorities fell by the wayside. Getting back to the basics and focusing on what is important, I plan to make progress this week.

If you are looking for that one organizational project to complete this week, consider working on your important documents. Need to start at the beginning? Then begin here. If you are following my filing system, then this second file opening holds our head of household’s term life insurance policy and combination whole life and long-term care insurance. The last bundle of paperwork in this file is the accidental death insurance policies.

Accidental Death Insurance

If you are a member of a bank, federal credit union, or credit card holder, then you have probably received an invitation for accidental death and dismemberment (AD&D) insurance coverage.

These policies usually give you $2,000 of 24-hour protection provided through your bank, credit union, or credit card provider without cost to you. After you accept this insurance, then you will receive options to increase your coverage for minimal cost per month.

Accepting the Free Coverage

Since these policies are nice backups, I always accept the basic coverage since the policy is free. These policies are not whole life insurance or term, but will disperse payment after death or dismemberment due to an accident.

These policies are very specific and limited, so our family bypasses the options to increase these benefits. However, we do keep the free policies.

Choosing your Beneficiary

At least once a year, I call the insurance providers to verify our beneficiary designations are up-to-date. I choose a primary beneficiary and two contingent beneficiaries.

If my family can receive a claim due to an accident, then I want to offer the insurance company multiple ways to get the payment into my family’s possession.

Documents Kept Safe

These two policies for Paul, provided through our credit union, include the following documents:

• Certificate of Insurance
• Correspondence from Provider
• Beneficiary Designations

Each set of documents is paper clipped together, and then both sets are paper clipped together and housed behind Paul’s combination whole life and long-term care insurance documents. All these items are then placed in the second file opening of Box 2, holding our important insurance documentation.

With another file opening complete, you are on your way to getting those insurance documents organized. Though our files are different, finding a place for each type and labeling the sections allow for quick retrieval. Besides getting organized, filing your important documents will help you in using time wisely for years to come. Happy organizing!