Haris Ashley
How long you should keep medical insurance policies depends on a variety of factors. Generally, you should keep insurance documents for as long as the policy is in effect or, if your policy has ended, until any open claims are settled. If you have no open claims, you can discard your documents when the policy ends and you get a new one. However, if you have a recurring or serious medical condition, it is recommended to keep medical documents for up to eight years after receiving treatment. Additionally, if your policy is related to a business or if you are self-employed, you may need to retain your insurance records for several years for tax purposes. It is important to securely store and destroy sensitive medical information to prevent it from falling into the wrong hands.
| Characteristics | Values |
|---|---|
| How long to keep insurance policies | Keep insurance policy paperwork until the policy has expired and all claims have been settled. |
| How long to keep insurance records | Keep insurance records for financial and legal purposes. |
| How long to keep medical insurance records | Keep medical records on paper or scanned onto a computer. If you don't have a recurring or serious condition, keep documents like prescription receipts for a year. Keep them longer if you've claimed prescription costs on your taxes. |
| How long to keep insurance records for tax purposes | The IRS advises taxpayers to keep relevant documentation for as long as they may be needed to verify deductions. Keep records for three years from the filing date of your original return or two years from when you paid your taxes, whichever is later. If you didn't report income, hold onto your documents for six years. |
| How long to keep insurance records for businesses | If the insurance records are for a business, the IRS recommends keeping them for three to seven years, depending on the type of document. |
| How long to keep records for workers' compensation policies | Keep records of workers' compensation policies indefinitely. |
| How long to keep records for occurrence-based policies | Keep occurrence-based policies indefinitely as they cover any loss that occurred during the policy term, even if the claim is made decades later. |
| How long to keep records for property policies | Keep property policies for six years. |
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What You'll Learn
Medical EOBs: Keep for 3-8 years, or indefinitely if you have a chronic illness
Medical EOBs, or Explanation of Benefits, are breakdowns of how an insurance claim was paid on your behalf. They detail the medical procedures or treatments provided to the patient, the charges, and what was and was not covered by your insurance.
The length of time you should keep medical EOBs depends on individual circumstances. The IRS advises keeping tax-related documents for three years from the filing date of your original return or two years from when you paid your taxes, whichever is later. If you didn't report income that you should have, hold on to your documents for six years. Outside of these guidelines, it is generally recommended to keep EOBs for three to eight years after receiving medical care. If you have a recurring or serious condition, it is advisable to keep EOBs and other medical documents indefinitely. This is because occurrence-based policies can cover any loss that occurred during the policy term, even if the claim is made decades later. For example, if unknown side effects of medical treatments are discovered in the future, having the relevant EOBs will ensure you can make a claim.
If you do not have a chronic illness, you can keep prescription receipts for a year in case your insurance company needs to see them. However, keep them for longer if you've claimed prescription costs on your taxes. You should keep other medical bills until you've paid them and filed your income tax return. If there is a problem or question relating to an EOB or a medical service listed on an EOB, keep the document until the issue is resolved and all parties have been notified.
It is important to securely store and destroy your EOBs and other medical records to prevent sensitive data from falling into the wrong hands.
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Insurance ID card: Keep as long as the policy is valid
An insurance ID card is a crucial document that acts as proof of insurance. It must be provided when requested by a police officer or when involved in an accident in many states. It is recommended to keep your insurance ID card as long as the policy is valid. You can keep it in your wallet, glove compartment, or center console of your car, or as a digital file that you can easily access on your phone.
Once your insurance policy expires, you will receive a new set of ID cards with the updated policy period and expiration date. At this point, you can dispose of or shred your old insurance ID card. However, if you have any open claims on your previous policy, it is advisable to retain your old insurance ID card along with all other relevant documents until the claim is resolved.
If you use your vehicle for business purposes, consult your tax professional for guidance on how long to keep your insurance ID card for tax or legal purposes. The recommended retention period may vary depending on your specific circumstances and the requirements of your business.
Additionally, if you have health insurance, your insurance ID card may take a few weeks to arrive after your policy starts. During this time, you can utilize digital options provided by your insurance company, such as mobile apps or downloading a temporary card from their website. You can also contact your healthcare provider and request them to wait to submit claims until you receive your physical insurance ID card.
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Claims-made policies: Keep for the policy term and a set period after
Claims-made policies are a type of insurance policy commonly used to cover risks associated with business operations. They are also used to cover businesses from claims made by employees, including wrongful termination, sexual harassment, and discrimination claims. These policies are often carried by businesses alongside occurrence policies, which extend coverage for claims made on inactive policies if the claim events occurred when the policies were active.
Claims-made policies are triggered when a "claim" for BI (Bodily Injury) or PD (Property Damage) is first made against an insured, provided the BI or PD took place after the "retroactive date" shown in the policy declarations page. Unlike occurrence-based policies, claims-made policies do not require that the BI or PD take place during the same policy period in which the claim is made against the insured.
Claims-made policies typically include a specified period in which coverage applies, and any claims made during that time are covered under the policy. This is different from occurrence policies, which are based on the time the claim event occurred. Occurrence policies cover claims that come from incidents that fell during a specified period, regardless of when the accident took place, as long as the injury or damage it caused occurs during the policy period.
When it comes to retaining insurance records, it is generally recommended to keep them for at least as long as the policy is in effect or, if the policy has ended, until any open claims are settled. This is especially important for claims-made policies, as the timely reporting of claims is a crucial aspect of this type of policy. Therefore, it is advisable to keep claims-made policies for the policy term and a set period after to ensure compliance with the reporting requirements.
It is worth noting that some policies offer an extended reporting period (ERP) that provides additional time after the policy has ended to report claims. This option is typically purchased for 1 to 6 years and can be useful in managing tail exposure, which refers to the timeframe beyond the expiry of a policy.
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Occurrence-based policies: Keep indefinitely
An occurrence-based policy is an alternative to a claims-made policy. The latter provides coverage only if a claim is filed while the policy is active. Occurrence-based policies, on the other hand, cover claims made for injuries sustained during the life of an insurance policy, even if they are filed after the policy is cancelled. In other words, it is possible to file a claim later, long after the contract has expired, provided there is evidence that its cause or triggering event took place during the period the insurance was active. This type of policy is designed to cater to events that may cause injury or damage years after they occur, such as exposure to hazardous chemicals. For example, if an individual is exposed to hazardous chemicals, a significant amount of time could pass before they fall ill. Occurrence coverage will usually cover the employer and the former employee for life.
Occurrence-based policies are typically needed for longer protection. For instance, if you get into a work-related car accident while your policy was active, but don't notice one of the effects of the accident until years later, you could still file a claim against your insurance even after your policy expired. General liability insurance, commercial auto insurance, and umbrella liability insurance are the most common examples of occurrence-based policies.
Occurrence-based policies are also beneficial in situations where a policyholder may not immediately become aware of an incident that could lead to a claim. For example, in the case of a customer who suffered an injury at a restaurant and sued the owners a year after the incident, claiming they were negligent in keeping their premises safe. The restaurant owners were able to submit a claim to their insurance company and get covered for the loss, even though they had cancelled their insurance after selling the restaurant.
Given that occurrence-based policies can cover claims made years after the policy has expired, it is advisable to keep the policy documents indefinitely. This will ensure that you have proof of the policy and its terms in the event of a claim. It is also important to securely store and destroy these documents to prevent sensitive data from falling into the wrong hands.
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Tax purposes: Keep for 3-7 years
The length of time you should keep a document depends on the action, expense, or event which the document records. If you are keeping your medical insurance policies for tax purposes, the IRS advises taxpayers to keep relevant documentation for as long as they may be needed to verify deductions.
If you are self-employed, you may need to keep your insurance records for a few years for tax purposes. If you are using your insured asset for a business, the IRS recommends keeping your documents for three to seven years, depending on the type of document. For example, if you file a claim for credit or refund after filing your return, keep your records for three years from the date you filed your original return or two years from the date you paid the tax, whichever is later. If you haven't reported income that you should have, keep your records for six years. If you claimed a loss from worthless securities or bad debt deduction, keep your records for seven years. If you didn't file a return, keep your records indefinitely.
If you have a chronic or serious illness, keep your records for five years after the last treatment date, or seven years after you've claimed the medical tax deduction. If you don't have a recurring or serious condition, keep documents like prescription receipts for a year in case your insurance company needs to see them. Keep them longer if you've claimed any prescription costs on your taxes.
Outside of the IRS guidelines, it is generally recommended to keep medical insurance policies for three to eight years after receiving medical care.
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Frequently asked questions
The IRS advises keeping relevant documents for as long as they may be needed to verify deductions. If you plan to file a claim for a refund, keep your insurance policies and other tax documents for three years from the filing date of your original return or two years from when you paid your taxes, whichever is later. If you didn't report income that you should have, hold onto your documents for six years.
If you have a recurring or serious condition, it is recommended to keep your medical insurance policies for two to eight years. You can choose to store them as paper files or scan them onto a computer.
If you don't have any open claims, you don't need to keep old, expired insurance policies. However, if you have any incidents that may result in a future claim, keep all related documents and your policy until the claim is resolved.
If you have an open claim, keep your policy documents, receipts, and bills until the claim is resolved and all payments have been received.
