Yes, you should keep old insurance policies if you have an open claim, a potential future claim (especially for long-tail liability like professional errors or product issues), or need them for proof of coverage (like auto insurance cards) until replaced; otherwise, keep the declarations page and related documents for a few years (3-7) after the policy expires or a claim closes for reference, but discard the rest for security, digitizing if possible.
No need to keep the policies but you should keep a record of them. Just make a spreadsheet that has the dates, policy type, insurance company, and policy number. In the off chance that a claim comes up from something that happened a long time ago, that's all you'll need to contact the insurance company.
Once you have a new policy in hand, the old one can usually be tossed — unless there is an open claim that still needs to be resolved. In this case, it is a good idea to keep all documents, including car repair and medical care receipts, until the claim has been closed and all payments have been received.
Keep Forever
For Insurance Claims
Keeping your medical bills and Explanation of Benefits (EOB) statements for at least one year is a good practice. If a reimbursement dispute comes up, these documents serve as proof of what you paid and what your insurer covered.
Hold on to medical bills for a year, unless there's an ongoing insurance dispute or you claim a tax deduction for medical expenses. Keep health insurance policies for as long as the insurance is active.
If you track utility usage over time, keep your bills for one to two years. If you claim a home office deduction, keep them for three years. - To avoid identity theft, be sure to shred anything you throw away that contains your personal or financial information.
You generally don't need to keep 20-year-old tax returns; the standard IRS recommendation is to keep most tax records for 3 years, but 6 years if you significantly underreported income (25% or more), or even indefinitely if you never filed or filed fraudulently. For most people, keeping records for 3-7 years covers standard audits, but if those returns are from a time you bought/sold property or have complex investments (like worthless securities), you might need them longer, so consider shredding or securely disposing of anything older than 7 years unless it's for property records.
9 Paper Documents You Should Keep Forever in Their Original Form
Generally, you should keep most insurance documents for at least as long as the policy is in effect or, if your policy has ended, until any still-open claims are settled.
You can withdraw interest earned at capital gains rates, gain over basis, or borrow against your death benefit. Alternatively, you can elect to convert your life insurance policy into an annuity, with no tax on the transaction, using a Section 1035 exchange.
The 80/20 rule in insurance refers to two main concepts: the Medical Loss Ratio (MLR) under the Affordable Care Act (ACA), requiring insurers to spend 80% (85% for large groups) of premiums on care or refund the rest, and a common home insurance clause where you must insure your home for at least 80% of its replacement cost to receive full coverage for partial losses, preventing underinsurance. In health insurance, it limits administrative costs and profits, while in homeowners insurance, it ensures adequate dwelling coverage to avoid penalties on claims.
Reporting cash payments
A person must file Form 8300 if they receive cash of more than $10,000 from the same payer or agent: In one lump sum. In two or more related payments within 24 hours. For example, a 24-hour period is 11 a.m. Tuesday to 11 a.m. Wednesday.
The "20k rule" refers to the traditional IRS threshold for reporting income from payment apps and online marketplaces on Form 1099-K: over $20,000 in gross payments AND more than 200 transactions in a calendar year. While a law (the American Rescue Plan) temporarily lowered the threshold to $600, recent legislation, the One Big Beautiful Bill Act (OBBBA) (OBBBA), has reinstated the $20,000/200-transaction rule for tax years starting in 2025, providing relief for casual sellers and gig workers.
Zelle works differently by facilitating transfers directly between banks and does not report payments to the IRS.
Keep Forever
At What Age Can You Stop Filing Taxes? Taxes aren't determined by age, so you will never age out of paying taxes. People who are 65 or older at the end of 2025 have to file a return for that tax year (which is due in 2026) if their gross income is $16,550 or higher.
The IRS 7-year rule primarily applies to keeping records for claiming a deduction for bad debts or losses from worthless securities, allowing a longer period to file for a credit or refund, but it's not a universal audit limit; it's often a recommended safe buffer for general record-keeping, with the standard IRS audit period usually being 3 years, extending to 6 years for substantial income omission (over 25%) or foreign income issues, and indefinitely for fraud.
In a nutshell, you don't need to keep as many documents as you might have imagined. If you have items you're deducting on your tax return, such as medical expenses, purchases, utility bills, and other expenditures, you'll want to hang on to those important papers.
Here are some documents that you should be shredding and why it's important:
With tax considerations in mind, here are suggestions that may make sense for many people. Credit card and bank account statements: Save those with no tax return usefulness for about a year, but those with tax significance should be saved for seven years.