In medicine, no responsible doctor prescribes treatment without an annual check-up.
In finance, the same principle applies.
Life insurance and protection planning are not buy-once, forget-forever decisions.
They require regular review to ensure that what once made sense still does today.
This is where the Annual Protection Audit comes in.
An Annual Protection Audit is a structured, yearly review of a client’s insurance and protection portfolio, designed to confirm that coverage remains adequate, relevant, and aligned with current life realities.
What Is an Annual Protection Audit?
An Annual Protection Audit is a disciplined review of a client’s:
- Life insurance coverage
- Health and critical illness protection
- Disability and income protection
- Beneficiaries and ownership structure
- Policy performance and premium sustainability
Its objective is simple:
To identify gaps before they become financial emergencies.
Protection planning has always been about preparedness, not prediction.
A yearly audit ensures the plan evolves as life evolves.
Why an Annual Protection Audit Is Necessary
Life does not stand still.
Over the course of a year, any of the following may occur:
- Marriage, separation, or the birth of a child
- Career changes or business expansion
- Increased income—or unexpected financial strain
- New debts, mortgages, or educational obligations
- Changes in health or family responsibilities
A protection plan designed three or five years ago may no longer reflect today’s risks.
The Annual Protection Audit ensures coverage keeps pace with responsibility.
How to Conduct an Annual Protection Audit
1. Review Life Changes Since the Last Meeting
Start with what has changed, not with the policies.
Ask:
- Has your family structure changed?
- Has your income increased or become less stable?
- Have your financial responsibilities grown?
Protection should always follow responsibility.
When responsibilities increase, coverage must be reassessed.
2. Recompute Life Insurance Adequacy
Life insurance should be reviewed against current needs, not past assumptions.
Revisit:
- Outstanding loans and liabilities
- Income replacement needs
- Education funding for children
- Estate liquidity requirements
A common mistake is assuming that “having insurance” means “having enough insurance.”
An audit distinguishes the two.
3. Assess Health and Critical Illness Coverage
Medical inflation and lifestyle risks make this review essential.
Check:
- Is coverage sufficient for today’s hospital costs?
- Are critical illness benefits still aligned with current exposures?
- Are there exclusions or limitations that need attention?
Health risks do not wait for convenience.
Proper coverage must be in place before illness strikes.
4. Review Income Protection and Disability Coverage
Income is a client’s most valuable asset and often the least protected.
Confirm:
- Whether disability or income replacement coverage exists
- If benefits are enough to sustain the family during incapacity
- If policies still reflect the client’s current occupation and income level
Protection planning is incomplete if death is covered but disability is ignored.
5. Check Beneficiaries, Ownership, and Policy Structure
Administrative details are often overlooked, but they matter greatly.
Verify:
- Are beneficiaries still appropriate?
- Are policy ownership and trusts properly structured?
- Are there new dependents who should be included?
An outdated beneficiary designation can undo years of good planning.
6. Evaluate Policy Performance and Premium Sustainability
For investment-linked or long-term policies, review:
- Fund performance and charges
- Policy sustainability under current premium levels
- Whether adjustments are needed to keep policies in force
A policy that lapses due to neglect provides no protection at all.
The Outcome of a Proper Annual Protection Audit
A well-conducted Annual Protection Audit delivers:
- Clarity on current protection adequacy
- Early detection of gaps and risks
- Adjustments made while options are still available
- Peace of mind for the client and their family
Most importantly, it reinforces a fundamental truth in financial planning:
Protection is not a transaction. It is a continuing responsibility.
Final Thought
The best protection plans are not the most complex.
They are the most well-maintained.
An Annual Protection Audit ensures that promises made by insurance policies remain promises that can be kept, when families need them most.
In financial planning, discipline has always outperformed guesswork.
And nothing reflects discipline better than a yearly review.
All the best my friends!!
#acgadvice
