One Action That Makes Life Insurance and Estate Planning so Much Easier

When I saw the subject line in the email from my dad, a knot lodged in my stomach. Estate file, it said.

Sure, I’d need the document someday. He’d included information to help me or my mom if he became incapacitated or died, like details about his life insurance policy. But probably—hopefully—that day wouldn’t come for another 15 or 20 years, given the longevity that coursed through my dad’s family. 

Thanks, Dad. Love you lots, I emailed him back, quickly stashing the unpleasant topic in a cobwebbed corner of my mind. 

But just a few months later, my seemingly healthy 74-year-old dad was diagnosed with advanced, aggressive lung cancer. In a series of bland hospital rooms, I took diligent medical notes. I held my dad’s hand, took breaks to sit in the family room and cried. 

My dad, meanwhile, did what he’d always done: protected and planned for his family. He even had me tote his laptop to the hospital so he could show me his spreadsheet of bill due dates. He made sure to show me the file that contained his advanced healthcare directive. 

My amazing dad died only ten days after his diagnosis. My mom and I were shocked and crushed—and yet there were still logistics we needed to take care of. We needed to continue paying my parents’ bills, get information to the mortuary and initiate the process of collecting my dad’s life insurance. 

The information in the file he’d compiled went from being something we’d maybe need in the future to something we needed right now. His file contained everything we needed to handle the logistical and financial aspects of the loss. This ranged from the physical location of my dad’s life insurance policies and tax returns, to instructions on how to locate passwords for various accounts, to his Social Security number.

Without this information, the already challenging issues of settling his estate would’ve been exponentially harder. It could’ve even been costly—if my dad hadn’t been so organized, my mom might’ve missed out on life insurance benefits or racked up late fees on overdue bills. 

Life Insurance: Importance of Keeping Your Family in the Loop

Life insurance is a key way to protect your family if something were to happen to you. You designate a life insurance beneficiary to receive a financial payout or “death benefit” that they could use however they need. 

If you were to pass away, your loved ones would need to file a claim with the insurance company. This typically involves filling out some paperwork and providing documentation such as a death certificate. Morbid, yes, but once the insurer has evidence that the insured person has passed away, they’ll begin the process of sending the funds to the beneficiary named in the policy. 

In some cases there may be a “contestability period,” which is usually the first two years of a policy. During that time, an insurer may investigate claims that are filed. Generally, the only reasons a term life insurance policy’s death benefit would be denied are if the insured person committed suicide within the first two years of coverage or if they misrepresented themselves on the original application. 

Of course, if your family doesn’t know that you have a life insurance policy, then they won’t know that they should start this process. And if they don’t know which insurer issued your policy, then they may not know how to start the process of filing a claim. As much as $1 billion in life insurance payouts are unclaimed, according to an investigation by Consumer Reports. You can prevent your loved ones from joining that statistic by making sure that they have all the information about your life insurance policy that they might need—long before they need it. 

This includes:

• Whether or not you have a policy

• What kind of policy it is (for example, term vs. whole life insurance)

• If it’s a term life policy, you’ll probably want to tell them how long the term length is and when it expires

• What the benefit amount is for that policy

• Which insurer issued the life insurance policy

• Any other information they’ll find useful if filing a claim, such as the name of a life insurance agent you worked with, login information for online accounts, etc.

How to Create Your Own ‘In Case of Death’ File

I can list about 103 tasks I’d happily procrastinate with to avoid pondering my own mortality. So let’s be clear—an estate file like my dad’s doesn’t need to be fancy or complex. My dad happened to be a hyper-organized type with an Excel spreadsheet for everything, but his estate file was a simple Word document. He used basic subheadings like computer files, retirement benefits and estate planning. 

It served as a treasure map, telling me and my mom where to find all the information we needed. 

There are a few different approaches you can take in putting together an estate file. Melanie Cullen, author of Get it Together: Organize Your Records So Your Family Won't Have To, was left scrambling for key info after her mother’s death. “There were too many surprises and unknowns,” says Cullen. “I didn’t want to do the same thing to my kids.”

Cullens recommends gathering all the documents and information your loved ones might someday need in one physical location—just don’t forget to let your next of kin know where it is. 

For her part, she stores her information in a safe. “It’s secure and readily accessible to me and my survivors.” She regularly drills her adult children on how to access her safe. 

Alternately, you might choose to keep track of things digitally. In my family’s case, my parents split their time (and their filing systems) between two homes on separate coasts, so my dad’s method was to periodically email an updated document to me and my mom in lieu of keeping all the information in one physical location.

Note: Fabric's app can help you keep track of your financial accounts and share them with your spouse or partner. To get a sense of your financial picture for free, you can link accounts from major banks and institutions, even ones that aren’t joint accounts. This broad financial picture includes your will and life insurance policy from Fabric, too.

Once you decide where to keep your vital documents, it’s time to start gathering them. Below, a list of things to include in your file or document. 

What to Include in Your ‘In Case of Death’ Document

Digital Accounts

• How to access all your passwords (ranging from life insurance policies and banks to utilities to social media) 

• Password to your computer

• Any online payment accounts (Paypal, Venmo, etc.)

• List of all bank accounts with account numbers (you can also transmit this information by syncing your accounts through Fabric)

• Whether you’ve set anyone up as your “digital emergency contact” for password managers or other websites

Physical Documents

• Your last will and testament (if you make an online will through Fabric, you can share the text of your will with key people such as your beneficiary, executor and child’s legal guardian—and your spouse or partner can view it alongside your list of financial accounts) 

• Life insurance policies (likewise, if you have term life insurance through Fabric, your spouse or partner can see your policy details alongside your list of accounts; you can also share your policy info with your beneficiaries, so they can create an account and have a direct line to customer support if ever they need to make a claim)

• Advance health care directive

• Financial power of attorney (note: there are several different types of power of attorney)

• Any other estate planning documents

• Stock certificates

• A note listing the location of valuables (cash, jewelry, etc.)

• Recent tax returns

• Deeds to property (auto, real estate)

• Marriage or divorce certificates

• Social Security card

Other Information That Might Help Your Family

• Information on retirement/pension benefits

• Details on any POD accounts (payable-on-death designations specifying who should inherit things like bank accounts)

• Information on any business interests

• Contact information for professionals, including attorneys, tax professionals, business partners, etc.

• Guidance on any shared bills or expenses, including how and when each is paid

• Biographical information for an obituary (my dad included directions on where to find a document he’d written that included key dates from his life, a list of  public service and organizations he’d belonged to, etc. and this info was a great help when it came time to write his obituary)

• Your preferences for burial or cremation, and any instructions for your memorial service like a favorite song, flower, or location (when you make a Fabric will, you’ll be asked if you have any preferences for final wishes)

• Letters to loved ones with any family history, advice and hopes for their future

After creating your file, it’s a good idea to update it annually, or anytime you have a major life change. This could include a marriage or divorce, birth of a child or an out-of-state move. My dad spent his entire adult life providing for, protecting and planning for his family. 

At first, I’d wanted to pretend that this document didn’t exist. Only a few months later, it turned out to be an extension of his love. It doesn’t erase the sharp ache of loss in my sternum, the grief that my kids won’t take any more annual trips to the fair with their papa or the looming dread of facing the first holidays without him. But his preparedness has made life much, much easier for my mom and me as we walk through this painful time. 

It’s also taught me that being prepared is a powerful act of love. Soon, I’ll be drafting my own estate document. This preparedness only represents a fraction of my dad’s loving legacy, but I’m so grateful he took the time to get organized.  

Fabric exists to help young families master their money. Our articles abide by strict editorial standards.

Fabric by Gerber Life exists to help young families master their money. Our articles abide by strict editorial standards.

Information provided is general and educational in nature and is not intended to be, and should not be construed as, financial, legal, or tax advice. Laws of a specific state or laws relevant to a particular situation may affect the applicability, accuracy, or completeness of this information. Federal and state laws and regulations are complex and are subject to change. We make no warranties with regard to the information or results obtained by its use, and disclaim any liability arising out of your use of, or reliance on, the information.

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