Policy audit report is the formal written summary produced after completing a detailed review of an existing life insurance policy or group of policies. The report consolidates key findings from the audit, including policy type, carrier, issue date, face amount, premiums paid, cash values, loan balances, guarantees, cost of insurance trends and projected duration under various assumptions. It often compares current performance to the original illustration, highlights underfunding or over-loaned situations, and outlines potential risks such as early lapse or loss of desired guarantees. The policy audit report may include side-by-side comparisons of alternative solutions, such as new products or revised funding strategies, along with pros, cons and implementation steps. For trustees, business owners and fiduciaries, the report serves as documentation of due diligence and ongoing oversight of insurance assets.

In day-to-day practice, advisors and advanced planning teams use policy audit reports to communicate complex insurance findings in a clear, decision-ready format. After collecting statements and in-force illustrations, the advisor works with internal specialists or BGAs to prepare a report that can be presented to clients, trustees or boards. During review meetings, the report guides discussions about whether to retain, modify or replace coverage and what funding changes may be required. For trust-owned life insurance or corporate-owned life insurance, policy audit reports are often kept in permanent records to evidence prudent monitoring and to support regulatory or legal reviews. A well-crafted report uses concise language, charts and projections to make risks and options understandable, enabling informed consent for actions such as premium increases, 1035 exchanges, face reductions or policy terminations.