Tracking various types of insurance cost, benefits, and asset value/net worth

skeleton567 Member ✭✭✭✭
edited December 2020 in Investing (Windows)

Over the years I tried several different methods of tracking a variety of life insurance policies in my Quicken records with varying features and benefits.  I believe I have found a fairly nice solution which I will share.

All my policies had a face value.  Some had accidental death benefits.  Some policies pay dividends and pay interest on dividend deposits, both of which may be withdrawn or left to accumulate.  Others had cash value accumulation and paid-up additions.  Last is a life insurance annuity which contains securities that fund the insurance benefit.  The goal has been to accurately record this variety of features some of which are 'investments' and others are 'assets'.  The difference for me has been the distinction of estate-value assets versus available 'investment' assets for calculations of net worth and taxes.  

Originally I had created separate accounts for tracking the insurance value, accidental death benefit value, and cash value for each separate policy from three companies. This lead to too many separate accounts within my Quicken historical files, and the need to carry these accounts forward into annual files to give an accurate net worth history.  I needed a better way to handle this.

The variety of features boiled down to what could be thought of as 'securities' with a 'share' value of $1.00. So I created 'securities' for the various features as follows:  (Be sure to assign a fake Symbol to each security if you EVER want to export your investment data!)

CL Policy 1 Face Value
CL Policy 1 AD Benefit
CL Policy 1 DIV
CL Policy 1 INT

CL Policy 2 Face Value
CL Policy 2 AD Benefit
CL Policy 2 DIV
CL Policy 2 INT

NW Policy 1 Face Value
NW Policy 1 AD Benefit
NW Policy 1 Paid Up Additions
NW Policy 1 Cash Value

NW Policy 2 Face Value
NW Policy 2 AD Benefit
NW Policy 2 Paid Up Additions
NW Policy 2 Cash Value

NW Policy 3 Face Value
NW Policy 3 AD Benefit
NW Policy 3 Paid Up Additions
NW Policy 3 Cash Value

NW Policy 4 Face Value
NW Policy 4 AD Benefit
NW Policy 4 Paid Up Additions
NW Policy 4 Cash Value

Create a single Asset type account to contain the Face Value and AD Benefit data for each asset identified by the policy number.

two CL policies
four NW policies
one AM Annuity

For each of the issuing companies, also create an Investment type account to contain data for Dividend and Interest deposits, and for the ANNUITY, the stock trading history:

CL Insurance

NW Insurance

AM Insurance (Annuity)

For the annuity policy which was funded by an initial deposit from other cash assets, the maintenance of the investment data is the same as any other investment account in which you buy and sell funds, reinvest dividends, and withdraw annual premiums.

To begin the history for the Asset accounts, I did a shares 'ADDED' transaction for Face Value and AD Benefits for each respective policy using the appropriate 'securities', all at a price of $1.00.  As Paid Up Additions and Cash Value Increase transactions occur, they are updated via transactions also at $1.00 per share.

The history of the Investment type accounts is maintained by REINVEST dividend transactions.  Interest is recorded as INT transactions accompanied by BUY transactions for additional shares.  

Other fine points for all of this are to create appropriate CATEGORIES for the various component transactions to refine your reporting capabilities.  Further, in order by keep a good history of costs, do all the funding and premium payments as transfers to these accounts, either recording actual payments and transfers from a bank account or as deposits from the bank account and withdrawals by the insurance company.

By doing this, I have been able to create history from this data from the first insurance policy taken by my Dad in 1944 (summarizing opening balances until the point my detailed data began in 1961), and establish asset cost and investment history from when my Quicken history began in 1986.  If I had not already destroyed banking data from before 1986 my history could be even more complete. It is possible to at least track costs by recording annual or summarized premiums for each year. 

And interesting points I will make is that back in the 1980's I sold the four NW Insurance policies for the accumulated Cash Value and used the proceeds to fund the AM Insurance annuity holding the stock investments meaning that I have had the life insurance coverage paid from tax-free growth since then while paying NO out-of-pocket premiums. And the remaining two policies actually pay more in dividends and interest than the cost of the premiums.


Faithful Q user since 1986, with historical data beginning in 1943, programmer, database designer and developer for 42 years, general troublemaker on Community.Quicken.Com