A doctor is talking to a patient in an exam room.

Health care records that can help protect your finances

Life is filled with all sorts of financial roadblocks (some of them planned, some not). One of the biggest that many of us will face? Health care costs. Annual health spending is expected to outpace inflation and grow over 5% a year.1

Safeguards for your budget and savings can help. Adding a complete set of health care documents to your estate plan can allow your loved ones to manage your finances (and your care) when you can’t.

These documents and the conversations that go with them can be hard and uncomfortable. But completing them now and having those talks while you’re able can help ease burdens if you become ill or after you’re gone. Each item on this list (people to talk to, forms to fill out, and records or information to gather) may help ensure that the protections you’ve put in place—stay in place.

4 health care documents in your estate plan

1. Medical power of attorney/durable power of attorney for health care/health care power

  • Is it a legal document? Yes.
  • What it does: Identifies a health care proxy or agent who may make health care decisions for you if you are unable to make them yourself. Medical treatments often have financial implications, so some people name the same person to be their durable power of attorney (see below) as their health care proxy.

2. Living will/advance health care directive

  • Is it a legal document? No.
  • What it does: Offers your health care proxy instructions for your medical care should you be unable to make decisions for yourself. It’s typically included as part of an estate plan because treatment choices have financial and health implications.

3. HIPAA release/authorization

  • Is it a legal document? Yes.
  • What it does: Allows a hospital to release current health care information about you to loved ones. Without it, hospital staff won’t provide information about you to anyone other than your spouse, and you won’t be able to weigh in on treatment options either, which may have financial implications. If there’s someone you may be responsible for over the age of 18 (say, a college-age child) that lives elsewhere, fill one out for each state.

4. Do not resuscitate (DNR) order or physician orders for life-sustaining treatment (POLST)

  • Is it a legal document? Yes. It must be signed by the health care proxy and cosigned by a physician.
  • What it does: While there are no direct financial implications to having a POLST or DNR, it rounds out an estate plan. Either is the only legally valid form that medical staff will follow during cardiac or respiratory arrest should you require resuscitation, which may have financial implications.

1 estate plan document that helps

Durable power of attorney

  • Is it a legal document? Yes.
  • What it does: This differs from the durable power of attorney for health care; both are important. This gives a proxy the power to make financial decisions, including health insurance information, billing, and claims, on your behalf.

Graphic of a thumbtack. Tip: Update all health care and financial related documents as needed. “Your health is not the same at age 45 as it is at age 55, and your wishes and proxy may change, too,” says Tyler De Haan, director of business development retirement solutions for Principal®.

People to talk to about your health care plans

  • Your health care proxy: A health care proxy is a person you name in a medical power of attorney (see above) to make health care decisions for you.
  • Your loved ones: Spelling out your wishes (and sharing who is serving as your health care and financial stand-ins) isn’t bleak. “We all have optimism bias, and nobody ever thinks something bad will happen to them,” says De Haan. “But when an event happens, you can minimize the stress and anxiety family members are going to experience about your well-being and your financial picture if you have these things in place.”

Graphic of a thumbtack. Tip: Principal customers have access to free versions of many estate planning documents through ARAG. Set up your ARAG account and start planning.

4 health-care related records you need

1. Medical records

Include any diagnoses (past and present), surgeries, relevant tests, medical history, and current medication.

2. Health care providers

Include general care and any specialists, with contact information.

3. Health care insurance records

Include policy numbers and contact information.

4. End-of-life instructions

Include end-of-life preferences, such as memorial service and organ donation information.

Graphic of a thumbtack. Tip: Once you assemble all your documents and give them to your health care proxy, De Haan suggests creating a family love letter that lays out where everything is. You can use our health care document plan worksheet (PDF) to help.

Next steps

1 https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/NHE-Fact-Sheet

The subject matter in this communication is educational only and provided with the understanding that Principal® is not rendering legal, accounting, investment or tax advice. You should consult with appropriate counsel, financial professionals or other advisors on all matters pertaining to legal, tax, investment or accounting obligations and requirements.

The value-added resources provided through ARAG Services, LLC (ARAG®) are not a part of any insurance products and plan administrative services provided through Principal Life Insurance Co or affiliated with any company of the Principal Financial Group®. All resources may be changed or canceled at any time.

The use of resources provided by ARAG Services, LLC should not be considered a substitute for consultation with an attorney or advisor. Principal® is not responsible for any loss, injury, claim, liability, or damages related to the use of the ARAG Will & Legal Document Center resources.

Please remember that the ARAG legal documents, DIY Docs® are accurate and useful in many situations. Due to possible changes by a state, it is a good idea to periodically review a template used to be sure it is the most current template. Whether or not the document is right for you and your situation depends on your circumstances. If you want specific advice regarding your situation, consult an attorney.

Information is intended to be educational in nature and is not intended to be taken as a recommendation.​

Tyler DeHaan is a Registered Representative of Principal Funds Distributor.

Insurance products and plan administrative services provided through Principal Life Insurance Company®. Principal Funds, Inc. is distributed by Principal Funds Distributor, Inc. Securities offered through Principal Securities, Inc., member SIPC and/or independent broker/dealers. Referenced companies are members of the Principal Financial Group®, Des Moines, IA 50392. Certain investment options and contract riders may not be available in all states or U.S. commonwealths.

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