Keeping Track Of Your Life Insurance Policies

By Author: Paul Peter
Total Articles: 3
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It is not unusual to meet people who have misplaced their insurance policy documents or those who are not aware of how much their policies are worth. In such cases, the whole purpose of purchasing insurance may be defeated. Read on for some simple tips on how you can keep a track of your policy (ies)...

There are two aspects to keeping a track of your policies – keeping a physical track of them and keeping a financial track of them. Here are some tips that will help you keep a track of your policies from both angles…

Keeping A Track – Physically

This involves being organized regarding where you keep your policies and information regarding them. It also involves keeping your nominee and loved ones informed about the whereabouts of your policy document.

1) Keep all your important documents – your insurance policies, your house ownership papers, passports, etc., in one place.
2) Keep two sets of records of all your important documents – one in a physical copy, perhaps in a diary and one in an easily accessible soft copy. For instance, you could share a google document with your ...
... loved ones and everything about your policy – where it is kept, how it can be claimed, etc. can be mentioned there.
3) From time to time, let your nominee and loved ones know where you keep your important documents (including your insurance policies) and your comprehensive list of documents. If possible make the creation of such records a joint effort with your spouse or some other member of the family so that someone other than you is aware of what it contains and where it is.

Keeping A Track – Financially

Some insurance policies – such as term plans and non-participative money back or endowment plans - are relatively simple to keep track of. The sum assured is the only amount of money that can be expected and the time frames and conditions for payouts are clearly stated. Inthe case of Unit Linked Insurance Plans (ULIPs), you are allotted units that make up your investment and the value of the units change from time to time. In the case of participative policies, your life insurance company gives out bonuses either at intervals or at maturity, if its investments do well.

If you have purchased ULIPs:

Create an excel sheet with the number of units that you hold and the value of the units. Make it a point to review this sheet at least every quarter. Check how the units are performing against a benchmark.Although you may receive the option to switch between funds without any cost once a year, don’t use this facility unless you can benefit from it.
At least once a year, update your records (mentioned in ‘Keeping A Track- Physically’) with respect to the value of your units. Make a mention of any activities that you undertake – such as withdrawals or top ups – in your records.

If you hold participative policies:

You will usually receive an update from the company once a year. Make sure that you note down any relevant information, pertaining to bonuses, in your physical records.

End Note

While these may seem like rather time consuming activities, once you actually get down to doing them, you will realize that they are relatively simple and effortless. In fact, in the long run, they could save you or your loved ones valuable time.