What Documents Should I Keep?
With all the papers, files, and records we have at home, it can be difficult to decide which documents you should be holding onto, and where you should be putting them. Thankfully, there is a way to easily separate your important documents from the rest, and it starts with understanding the qualifications of a vital record.
Vital records are documents, files, or records with significant legal implications. These records are commonly kept under governmental authority, and most commonly include but are not limited to, birth certificates, marriage certificates, deeds, and social security cards. Simply put, these documents are “vital,” as losing them can result in a costly process with many difficulties.
That said, these vital records aren’t the only documents you should be holding onto, which is why some individuals include other relevant documentation, such as life insurance policies, health insurance policies, and other important documents with them. As such, it’s important to make sure all vital and important documents are stored in a secure location, and well organized. But where exactly should you start?
Storing your life insurance documents in the right place and for the right time isn’t all you need to worry about. You will also need to make sure that any life insurance policies you store have the following information attached
The Golden Rules of Storing Vital and Important Records
First and foremost, make sure all of your important documents, regardless of what they are, are kept in one place. We recommend organizing your documents with color-coded tabs, as this will make identifying what you need out of your file easier. Next, label your file clearly. Finally, we suggest that you keep copies of your original documents for quick reference, but make sure that you leave the originals in a secure location with a high level of protection, like a safety deposit box or fireproof safe.1
Tips for Storing Life Insurance Policy Records
Where should you store your life insurance policy records and for how long should you hold onto them? In short, you want to store all life insurance policy record originals in a secure location with the rest of your important and vital records. Consequently, you should keep copies of any life insurance policies you have close at hand should you need to review them. As for how long you should be holding onto your life insurance policy documents, the answer is indefinitely
. That is to say, you should keep your life insurance policy safely stored for as long as you have one.
However, storing your life insurance documents in the right place and for the right time isn’t all you need to worry about. You will also need to make sure that any life insurance policies you store have the following information attached, this includes but is not limited to:
- The full name of the life insurance company that issued the policy
- The name of the person or office to contact when it’s time to file a claim
- The policy number
- The type of policy
- The date the policy was issued
- And the amount of the death benefit
Tips for Storing Health Insurance Records
In order to store your health insurance records correctly, follow the same process as you would for storing your life insurance policies. That is to say, make sure you store any health insurance original documents in a safe place, and make copies of any original policies to store in a convenient location for a quick reference.
However, while most rules remain the same, you don’t necessarily need to hold onto your health insurance records indefinitely, as you would life insurance. Instead, it is suggested that you keep hold of your health insurance records for seven years in the event that you are audited by the IRS.2 In the event that any treatments are completed and
paid in full before the seven year mark, it is suggested that you retain proof of treatment and payment completion until you are certain that the matter is resolved. 2 After all has been verified by your health insurance provider, it is okay
to dispose of your health records no earlier than after one tax year. However, we suggest retaining them for the full seven year cycle to ensure that no obstacles arise in the future.
All in all, there are some golden rules to follow when organizing and storing vital records and important documents. However, it’s essential to pay attention to the unique rules attached to organizing and storing life insurance policies and health insurance information. Making sure you follow these golden rules while paying attention to the unique needs of specific documents will make it easy to locate, file, and claim your policy benefits—just remember to keep your originals stored in a safe and secure location!