Accounting Talk

John · Guest

Kinda of a basic question. I was going to track the term life insurance
my bride and I have as an asset. But it really isn't an asset is it? I
can't sell it or anything.

Does anyone track this in Quicken just for records sake or no?

Any thoughts any has would be helpful.

Cheers.

R. C. White · Guest

Hi, John.

"Track" your term life insurance in the same way you "track" your auto and
homeowners or renters insurance. Or the way you "track" your rent expense.

It's the same basic idea: We pay a premium for coverage for a limited
period. At the end of that period, the coverage simply expires with no
lingering effects. And no asset, either during the coverage period or
after.

I would not try to track any of these items, except possibly to allocate the
premiums over months, if I wanted to be precise about monthly budgeting.

Congratulations to you and your bride! ;<)

RC
--
R. C. White, CPA
San Marcos, TX
(Retired. No longer licensed to practice public accounting.)
rc@grandecom.net
Microsoft Windows MVP
(Currently running Vista Ultimate x64)

"John" <johnnstacey@gmail.com> wrote in message
news:h2FNh.260$iF1.23@newsfe04.lga...

Bob Wang · Guest

John:

I have many insurance policies that I maintain as "Asset" accounts.

I do it mainly as a method of having all policy numbers and contact
information in Quicken to make it easy for an executor.

You are correct that term life policies do not accrue a cash surrender
value, but the face value WILL be an asset in your estate.

The way *I* do these accounts is to first make sure that "Do Not Include in
Totals" is checked for the account.

I enter all premiums paid.

I then make an adjusting entry entitled "Premiums Paid" to zero out the
running total.

Of course, I have to delete the old adjusting entry, and make a new one
dated the same, or after, any new premiums paid.

Not a burden for me since most payments are annual.

I then make a final entry "Face Value" with the face value.

This convluted method reminds me what the payoff is, and how much I have
already put into a losing bet ;-)

Bob

John · Guest

Bob,

This was exactly what I was thinking of. Basically a record of what they
are and having all of the financial items in one place for an executor
or just for financial review with our planner.

Good tip on the keeping the asset from being added to the net worth even
though it is part of the estate.

Currently I have the premiums just as an expense category but I like the
idea of linking to the asset.

Thanks for the information and time.

john

Bob Wang wrote: