How To Add Life Insurance To Quicken?

Life insurance is an important component of a comprehensive financial strategy. While it is a good idea to keep track of premium payments in Quicken, the software does not currently support the tracking of life insurance policies. However, there are some workarounds that users have suggested. For instance, creating a `cash` account for each policy and manually updating the increase in cash value annually. Alternatively, some users have suggested creating a generic asset account for whole life policies or other non-indexed policies, while others have recommended treating life insurance as an `investment` account. It is worth noting that term life policies typically have no value and would not be tracked in Quicken.

Tracking life insurance policies

Whole Life Insurance Policies

Whole life insurance policies, which typically have a cash surrender value, can be considered an asset and should be tracked as their value changes. One way to do this is to create a generic "asset" account or an "investment" account to reflect the cash value of the policy. You can also track any premium expenses in your spending accounts under the "Insurance: Life" category. Additionally, you can include the current cash value of your whole life insurance policy in Quicken, but it will require periodic manual updates as Quicken doesn't automatically track this.

Term Life Insurance Policies

Term life insurance policies, on the other hand, usually have no cash value and are not considered an asset. Therefore, they are generally not tracked in Quicken. However, if you want to include term life insurance policies for informational purposes, you can create an Asset Account and set the opening balance to the value of the policy. You can also add details in the "Account Details>Comments" section for your beneficiaries to access if needed.

Alerts and Reminders

While Quicken doesn't have a specific feature to track insurance policies' expiry dates, you can set reminders in the Alert Center under the Tools Menu. Alternatively, you can add a Scheduled Reminder in one of your Cash accounts to remind you before the due date.

Workarounds

Some users have suggested workarounds to track their life insurance policies. One method is to treat the policy as a checking or savings account, allowing you to transfer money (representing payments) and track the balance (representing the cash value). Another approach is to track the policy as an investment account, with payments treated as transfers from your bank account into the investment, and then expensed within the investment account.

It is important to note that the methods described above may not cover all types of life insurance policies, and users are encouraged to adapt these suggestions to their specific needs and policy types.

Adding life insurance as an asset

Life insurance can be added as an asset in Quicken, but the process depends on the type of policy you have. If you have a whole life policy with a cash surrender value, you can add it as an asset and track its value changes. In this case, you can set up a generic "asset" account or use the "`other investment`" account option.

On the other hand, term life insurance policies, which are the more frequent type, typically have no value and therefore would not be tracked as an asset in Quicken. However, some users have chosen to include their term life insurance policies as assets by setting up an Asset Account and manually tracking any premium expenses. This can be useful for record-keeping or for your spouse to easily find the policy details if needed.

If you have a whole life insurance policy, here are the steps to add it as an asset:

• Go to the "Add Account" option in Quicken and select the "Asset" account type.
• Choose an appropriate icon for the "Other Assets and Liabilities" field. Options may include Property, Vehicle, or Assets, but you should avoid using Cash.
• Set the opening balance of the account to the value of your life insurance policy.
• Track any premium expenses in your spending accounts under the "Insurance: Life" category.
• Update the account balance periodically as the value of your policy changes.

It is important to note that Quicken does not automatically track the value of life insurance policies, so manual updates are required to maintain an accurate value. Additionally, the Face Value of an insurance policy, or the amount paid out upon death, is typically not included in Quicken as it is not something the policyholder will ever possess.

Categorising life insurance as an expense

Term Life Insurance

Term life insurance is generally more affordable than permanent life insurance as it provides coverage for a set number of years and does not accumulate cash value. It is designed for those who only need coverage for a certain number of years. If you have term life insurance, the premium payments you make can be categorised as an expense.

Whole Life Insurance

Whole life insurance is a type of permanent life insurance that provides coverage for your entire life. It also includes a savings component that accumulates cash value over time. If you have whole life insurance, the premium payments you make can be categorised as an expense, and the cash value of the policy can be tracked as an asset.

Universal Life Insurance

Universal life insurance is another type of permanent life insurance that provides coverage for your entire life. It has a flexible premium structure and includes a cash value component that earns interest. Similar to whole life insurance, the premium payments and any associated administrative fees can be categorised as an expense, while the cash value can be tracked as an asset.

Variable Life Insurance

Variable life insurance is a riskier type of permanent life insurance that includes a variable cash value component. The cash value rises and falls based on your payments and the performance of your selected investments. The premium payments and any associated administrative fees can be categorised as an expense, and the cash value can be tracked as an investment or an asset.

Final Expense Life Insurance

Final expense life insurance, also known as funeral or burial insurance, is a type of whole life insurance with a smaller death benefit designed to cover end-of-life expenses. The premium payments and any associated administrative fees can be categorised as an expense, and the cash value can be tracked as an asset.

Group Term Life Insurance

Group term life insurance is a type of insurance offered by employers as a benefit to employees. The associated costs, including the cost of the policy and any administrative fees, would typically be classified as benefits expenses.

Setting up a generic asset account

To set up a generic asset account in Quicken, you can follow the steps outlined below.

Firstly, it is important to understand the distinction between assets and liabilities. Assets refer to what you own, while liabilities refer to what you owe, and the difference between the two is your net worth. Quicken's asset accounts allow you to track the value of your possessions, such as your home, car, or other personal assets, to give you an accurate picture of your total net worth.

To set up a generic asset account, you can follow these general steps:

• Open Quicken and navigate to the "Tools" menu. From there, select "Account List" to view the list of your existing accounts.
• Click on the "Edit" button next to the account you wish to change.
• Select the "Asset" account type option. You may also choose a more specific type, such as "Home (with or without a Mortgage)" or "Vehicle (with or without a Loan)", depending on the nature of the asset.
• Click "OK" to save your changes.

When setting up a new asset account, you will also need to add a transaction to enter the initial value of the asset. Enter this amount in the "Increase" column, and the outstanding value will appear in the "Balance" field. It is important to note that the market value of your assets may fluctuate over time, so remember to update the asset value by adding adjustment transactions whenever there is a change.

Additionally, if you have a life insurance policy with a cash value, you can consider setting up a generic "asset" account to track its value. While life insurance may not typically be viewed as an investment, it can still be included in your financial overview.

By following these steps, you can effectively set up a generic asset account in Quicken, providing you with a comprehensive view of your financial status.

Creating a cash account for each policy

To create a cash account for each policy in Quicken, you can follow these steps:

Firstly, determine the type of life insurance policy you hold. The two most common types are term life policies and whole life policies. Term life policies typically have no cash value, while whole life policies have a cash component that grows due to premiums and interest.

If you have a whole life policy, you can set up a generic "asset" account in Quicken to track its cash value. This can be done by going to the Add Account dialog and selecting the "Offline Account" tab. From there, you can set up a new offline account that is not connected to any bank for downloading. You may also use the "'investment' account option if your policy contains an "'investment' element", although insurance is not typically viewed as a conventional investment.

For term life policies, some users suggest creating an Asset account and setting the opening balance to the value of the policy. This can be done by going to Account Details > Comments or Account Details > Display Options. However, it is important to note that term life policies usually have no value other than the "Payable upon death" amount and expire worthless if the policyholder does not die during the term.

Additionally, you can track the premiums paid for your life insurance policy as expenses in your spending accounts. Categorize these payments as "Insurance:Life" or "Insurance Premiums".

By creating a cash account for each policy, you can effectively track the cash value of your life insurance policies in Quicken.

Frequently asked questions