“I’m on board! Yes, I’d like a life insurance audit! … But really, what is it, and why do I want it?”

Does that describe your reaction to this title? You may not be alone. Life insurance has long held that mysterious scent of a wild thing, best left to the conquest of others. Let’s see if we can begin to understand the benefits of just such an audit, once we determine what it is, exactly.


We speak quite often about the need for at least an annual meeting with your wealth-management team. This team includes your CPA, wealth manager, insurance professional, estate planner and attorney. Your estate plan most likely involves life insurance strategies, as part of an effort to preserve the wealth that has taken you a lifetime to build.


These independent professionals possess the knowledge to successfully navigate the sometimes complicated process of bringing you from the discussion/planning phase to underwriting, and through to plan implementation. Insurance professionals often say, “Most people spend more time planning their summer vacations each year than they do discussing their insurance needs.” And you will most likely agree with that sentiment.


A life insurance audit is a comprehensive evaluation of your existing life insurance coverage to make sure that the policies match the policyholder’s needs.

  • It is designed to help determine how the insurance policies you own are meeting your current needs.
  • It considers the financial stability of the companies behind your insurance products.
  • It looks at the state of your policies, what happens to any lapsing policies and the consequences of any premium increases.
  • It determines if your policies are priced correctly, or a change is warranted in insurance product or of the company carrying the product.

Life insurance is a financial product and should be managed, like any other asset. Continued monitoring will make sure that the product is appropriate for you, that it is priced correctly and that it is performing as expected.

Investing your time in a life insurance audit is a piece of the estate-planning process.


  • Life insurance policies are often purchased based on assumptions about future performance and needs. Are your needs for life insurance still the same or have they changed?
  • Some insurance policies’ performance relies on credit rates or dividend payments from insurance companies. Is this product or the company behind the product performing as needed?
  • The amount and frequency of premium payments can impact the anticipated future values of a policy. Are you able to meet these policy requirements?
  • A life insurance policy’s death benefit may be impacted by late or missed premium payments or outstanding policy loans. Are you meeting the policy requirements?
  • Are there less expensive, yet appropriate policies out there? And would lump-sum or annual premium payments be desirable, versus monthly payments, in some cases?

A policy audit can ensure your plans and wishes, for your family and for your estate. A life insurance audit will not only help you meet those planning goals, but do it in a cost-effective manner.


Your CPA works alongside insurance professionals who consult with individuals, families and business owners as they provide financial coaching to guide you toward smart financial choices. The financial strength of the carrier and premium outlay are, of course, critical. Equally as important, though, is the essential benefit of engaging in a dialogue with a highly experienced and independent insurance professional.

When a policyholder works with an independent insurance producer, that individual is able to access both product designs and potentially improved underwriting, based on the autonomous agent’s knowledge of competing carriers’ different underwriting standards.

An insurance professional is accustomed to routinely questioning offers from underwriters and will pursue other insurance companies for an underwriting and product availability assessment. The point is to determine if abandoning one insurer for another is in your best interest.



Your CPA, estate planner, insurance professional and attorney are all advocates for you. Investing your time in a life insurance audit is a piece of the estate-planning process which should yield great rewards and leave you a little more secure in the land of the wild things.

This article was originally published in the February–April 2017 issue of Worth.