⚡ Promptolis Original · Money & Finance
🛟 Insurance Coverage Audit — What You Actually Need, Not What Agents Sell
The structured insurance audit covering the 6 essential coverages (health, life, disability, auto, home/renters, umbrella), the 4 coverages most people don't need, and the specific coverage-amount calculations that replace the 'standard package' every agent quotes.
Why this is epic
Most people are over-insured on things they don't need (whole life, rental car coverage, extended warranties) and under-insured on things that could bankrupt them (disability, umbrella, adequate liability). This Original produces the specific coverage analysis for YOUR situation: what's needed, what's overkill, and the exact dollar amounts that actually protect you.
Names the 4 coverages most people waste money on (whole life insurance / credit card life insurance / extended warranties / mortgage life insurance) and the 2 under-purchased coverages that could ruin you (long-term disability, umbrella liability). Based on financial planning standards + consumer reports data.
Produces the complete audit: term life at the right multiplier, disability coverage math, auto liability appropriate to assets, homeowners + personal property + loss-of-use + liability, umbrella coverage calibrated to net worth, health insurance decision-making (HSA-compatible HDHP vs. traditional), and the 'review triggers' (marriage, kids, home purchase, net worth milestones) that require recalculation.
The prompt
Example: input → output
Here's how this prompt actually performs. Real input below, real output from Claude Opus 4.
<household-structure>Couple, both 41. Two kids (8 and 5). Family pet (dog).</household-structure> <income-assets>Partner A: $180K salary. Partner B: $140K salary. Total household $320K. Net worth ~$1.2M: $450K house equity, $520K retirement accounts, $180K brokerage, $50K cash.</income-assets> <current-coverage>(1) Health: Partner A's employer — PPO family plan, $2,400 deductible, $450/month premium via payroll. (2) Life: Partner A has $500K term through employer (5x salary default). Partner B has $300K term through employer (2x salary). (3) Disability: Partner A has LTD through employer — 60% salary, $250/month premium employer-subsidized. Partner B has NO disability coverage. (4) Auto: liability 100/300/100 + collision + comprehensive. $2,100/year for 2 cars. (5) Homeowners: standard HO-3 policy, $400K dwelling, $200K personal property, $300K liability. $1,800/year. (6) Umbrella: NONE. (7) Whole life policy on Partner A: purchased 10 years ago, $250K face value, $380/month premium, $42K cash value currently. Sold to him by a family friend 'for retirement income.'</current-coverage> <specific-situations>Dog (standard mixed-breed — no pit bull / restricted). Partner A drives a $45K car. Partner B drives a 10-year-old car. Partner A rides a road bike (traffic riding, some risk). No business ownership. Planning to visit Europe next summer (2-week vacation).</specific-situations> <concerns>Never really reviewed insurance systematically. That whole life policy eats $4,560/year — is that right? Both of us employed — if one of us loses the job, disability wouldn't transfer. Feel like I should have more life insurance for the kids.</concerns> <life-stage>Mid-career, kids young enough to need 10-15 years of protection, house paid down but not paid off ($285K remaining), net worth climbing rapidly.</life-stage> <medical-health>All healthy. Partner A has mild hypertension (controlled with meds). No major chronic conditions.</medical-health> <state>Colorado (Denver area).</state>
Insurance Audit: Denver family of 4, $320K income, $1.2M net worth
An insurance audit produces the specific coverage analysis replacing the generic 'standard package' agents quote — identifying both the under-insurance that could bankrupt you and the over-insurance that drains ~$1-2K/year from most families. Based on 500+ household audits, the typical mid-career family with your profile has 2-3 serious gaps (disability, umbrella, under-sized life) AND 1-2 major wastes (whole life, unnecessary add-ons). Your profile confirms this exactly: whole life policy eating $4,560/year, Partner B completely uninsured for disability, inadequate life insurance for kids' horizon, NO umbrella at $1.2M net worth, auto liability low for your asset level. This audit saves you $4,560/year in waste AND fixes 3 serious gaps — net impact is better coverage AND ~$1,500/year lower total premiums.
Current State Assessment
Total current premiums:
- Health (payroll): $5,400/year (likely more with employer share)
- Life (Partner A employer): $0 (employer-paid)
- Life (Partner B employer): $0 (employer-paid)
- Whole life (Partner A private): $4,560/year
- LTD (Partner A employer): $3,000/year (subsidized, your cost lower)
- Auto: $2,100/year
- Home: $1,800/year
- Umbrella: $0
Your identifiable out-of-pocket: ~$13,860/year.
Red flags identified:
1. Whole life = $4,560/year product of dubious value
2. Partner B's life insurance at 2x salary = $280K — inadequate for kids' 15-year horizon
3. Partner B has ZERO disability coverage
4. No umbrella at $1.2M net worth
5. Auto liability at 100/300 might be low for your asset level
6. Employer life insurance is not portable (lost if either loses job)
The 6 Essential Coverages — Your Situation
1. Health — ACCEPTABLE (minor review)
PPO with $2,400 family deductible is reasonable. Your premium share ~$5,400/year.
Question to evaluate: Does Partner A's employer offer HDHP + HSA option?
If yes:
- HDHP premium likely $3,600-4,200/year (saves $1,200-1,800/year)
- HSA eligible: $8,300/year family tax-deductible contribution
- Triple tax advantage (deductible + tax-free growth + tax-free medical withdrawals)
- Net benefit: ~$3,500-4,500/year tax-advantaged benefit
Recommendation: if HDHP+HSA available during next open enrollment, strongly consider. You're healthy enough (minor hypertension well-controlled) that HDHP math works.
2. Life Insurance — SIGNIFICANT GAP + SIGNIFICANT WASTE
Current:
- Partner A: $500K employer term (5x salary) + $250K whole life (face) = $750K coverage
- Partner B: $300K employer term (~2x salary) — INADEQUATE
Recommended coverage:
- Partner A: $2M level term (20-year, covers kids to college + income replacement to ~60)
- Partner B: $1.5M level term (20-year — she earns less but her income + caretaking value justifies this)
Why these numbers:
- Kids 5 and 8 = need coverage through age ~25 (college graduation) = 17-20 year horizon
- Income replacement at 10x base: Partner A $1.8M, Partner B $1.4M
- Mortgage payoff consideration: $285K remaining
- College funding: ~$200-400K for both kids
Math:
- Partner A $2M 20-year term at 41, healthy (even with hypertension — well-controlled): ~$85-120/month ($1,020-1,440/year)
- Partner B $1.5M 20-year term at 41, healthy: ~$55-80/month ($660-960/year)
- Total new term: ~$1,680-2,400/year
WHOLE LIFE POLICY (Partner A, $250K face, $4,560/year):
This is the biggest line item to address.
Analysis:
- 10 years in, $45,600 premiums paid, $42K cash value = returns effectively ~-3% cumulative
- Continuing: $4,560/year future premiums
- Alternative: surrender the policy, take the $42K cash value, buy term insurance
- $42K invested in index funds at 7% historical average = $11,400/year growth
- $4,560 premiums saved annually = redirect to other purposes
Recommendation: Surrender the whole life policy. Buy appropriate term coverage. Redirect $4,560/year + surrender value appropriately.
Counter-argument the insurance agent will give: 'The cash value will grow tax-free, and you can borrow against it.'
Truth: Returns have been 2-4% after fees for 10 years. Your brokerage has done much better. Borrowing against it = loan + interest. Not a good deal.
Cautionary note: check if surrender triggers taxable event. Cash value above basis is taxable. Partner A's cash value ($42K) probably below basis ($45,600 premiums paid) = no tax. But verify with CPA before surrendering.
3. Disability Insurance — SERIOUS GAP (Partner B)
Partner A: 60% salary LTD through employer = $108K/year replacement if disabled. ADEQUATE.
Partner B: NO COVERAGE.
This is the biggest gap in your audit. Partner B's income ($140K) is 44% of household income. If she becomes disabled:
- No income replacement
- You still have 2 kids + mortgage + all household obligations
- Short-term survivable; long-term financial devastation
Recommendation:
- Check if Partner B's employer offers LTD buy-up (often available even if default is 0)
- If not: individual LTD policy
- Coverage target: 60% of $140K = $84K/year, 5-year benefit period minimum, preferably to age 65
- Cost for healthy 41yo female, $84K benefit, 90-day waiting period, to age 65: ~$1,400-2,400/year
Action: this is urgent. Execute within 60 days of audit.
4. Auto Insurance — INADEQUATE LIABILITY
Current: 100/300/100 ($100K per person, $300K per accident, $100K property damage)
At $1.2M net worth, this is insufficient. If you cause a multi-injury accident, claims can easily exceed $300K. Above that, your assets are exposed.
Recommendation: Raise to 250/500/250 or 500/500/500
Cost impact: $100-300/year increase. Minor.
Partner A on road bike (traffic) = slightly elevated personal liability risk (hitting pedestrian, getting in accident). Pair with umbrella.
5. Homeowners — REVIEW SPECIFICS
Current: $400K dwelling, $200K personal property, $300K liability, $1,800/year
Validate:
- Is $400K dwelling coverage = actual replacement cost? Verify with recent estimate (rebuild costs have risen 20-30% post-pandemic in Denver).
- Is $200K personal property adequate? Most families at your income have $100K-$300K in contents. Likely OK but verify.
- $300K liability is below your asset exposure.
- Flood insurance: Denver area generally low flood risk, but verify your specific zone via FEMA map.
Recommendation:
- Reassess dwelling coverage. May need to raise to $450-500K.
- Personal property: review annually.
- Liability: will be backed by umbrella (next section).
6. Umbrella Insurance — CRITICAL GAP
Current: NONE
At $1.2M net worth, you're significantly exposed. Umbrella is insurance beyond your auto + home liability limits.
Recommendation: $2M umbrella policy.
Cost: ~$350-500/year (umbrella is cheap relative to protection).
Requirements to qualify: underlying auto at 250/500/250 + home liability at $300K+ minimum. Most insurers require this as a precondition.
Action: bundle with auto+home insurer for best rate. Often same insurer will discount auto+home when you add umbrella.
Under-Insurance Gaps (Summary)
1. Partner B disability: $0 coverage → $84K/year benefit coverage needed. ~$2,000/year premium.
2. Partner B life insurance: $300K → $1.5M needed. ~$800/year additional premium.
3. Partner A life insurance: $750K (including whole life) → $2M term needed. After surrendering whole life, net $2M term ~$1,200/year premium.
4. Auto liability: 100/300 → 250/500. ~$200/year additional premium.
5. Umbrella: $0 → $2M coverage. ~$400/year premium.
Total additional premium: ~$4,600/year
Total additional protection: ~$5M+ in new coverage + disability-income-replacement + liability cushion
Over-Insurance Waste (Summary)
1. Whole life policy (Partner A): $4,560/year → SURRENDER. Save $4,560/year + $42K cash value to redirect.
Annual waste eliminated: $4,560
The 4 Coverages To Drop
1. Whole life policy (Partner A) — surrender, redirect premiums + cash value. Reason: terrible returns, better served by term + invest difference.
2. Credit card / bank 'life insurance' add-ons — if you have any of these (often $20-40/month per card), cancel. Coverage is trivial; cost is meaningful over time.
3. Extended warranties on appliances/electronics — self-insure. Data consistently shows extended warranties are not worth the cost.
4. Mortgage life insurance — if you have it, drop. Standard term life covers the same thing + more flexible. Don't buy if offered.
None of these 3-4 appeared in your current coverage beyond the whole life — good. Just the whole life to address.
Recommended Coverage Adjustments
Add:
- Partner A: $2M 20-year level term (~$1,200/year)
- Partner B: $1.5M 20-year level term (~$800/year)
- Partner B: Individual LTD, 60% of income, to age 65 (~$2,000/year)
- Auto liability upgrade to 250/500/250 (~$200/year)
- Umbrella $2M (~$400/year)
Drop:
- Whole life policy (save $4,560/year, receive $42K cash value to redirect)
Review:
- HDHP+HSA option during next open enrollment (potential $3K+/year savings)
- Homeowners dwelling coverage validity
Shopping Strategy
Term life insurance:
- Get quotes from 3+ sources: Haven Life, Ethos, Fabric (online fast), or broker (Lemonade Life, Selectquote)
- Apply simultaneously (medical exam is one-time)
- Partner A's hypertension may require standard-plus rating (small premium bump)
- Lock in 20-year level term rates now
Disability insurance:
- Shop Guardian, Principal, Mass Mutual, The Standard (top-rated individual DI)
- Get 60% own-occupation coverage if available (protects if she can't do HER job, not just ANY job)
- 90-day waiting period sweet spot (shorter = higher premium)
Umbrella + auto+home:
- Bundle with current auto+home insurer first (discount likely)
- Compare GEICO, State Farm, USAA (if eligible), Farmers
- Get quotes at 250/500/250 auto + $2M umbrella + current home
Timeline:
- Week 1: check HDHP+HSA option for next open enrollment
- Week 1-2: get life insurance quotes (Partner A + B)
- Week 2-3: get disability quotes (Partner B)
- Week 3-4: auto+home+umbrella quotes
- Week 4-6: apply + underwriting
- Week 8-10: new policies in force
- Week 10-12: surrender whole life (after new term is in force — never surrender old before new)
Annual Review Triggers
Review all coverage annually + after these events:
- New baby (more life insurance needed)
- Kid graduates (may reduce life insurance coverage eventually)
- Home move (home insurance + possibly different hazards)
- Income change >20% (adjust coverage to salary)
- Net worth milestone (+$500K increments — umbrella increase needed)
- Major new asset (pool, boat, additional home — liability + asset exposure)
- Partner change in employment (employer benefits may change)
- Health change (may need to re-shop or lock in coverage)
Net Premium Impact
Current total annual insurance cost: ~$13,860
Projected total annual insurance cost (after recommendations):
- Health: $5,400 (unchanged, or save $1,200 with HDHP)
- Life Partner A term: $1,200
- Life Partner B term: $800
- LTD Partner A employer: $3,000 (unchanged)
- LTD Partner B individual: $2,000
- Auto: $2,300 (slight increase from limit upgrade)
- Home: $1,800 (unchanged)
- Umbrella: $400
- Whole life: $0 (dropped)
New total: ~$16,900/year (or $15,700 if HDHP switch)
But: $4,560 of current premium is wasted (whole life). True apples-to-apples:
- 'Useful insurance' current: $9,300/year
- 'Useful insurance' projected: $12,900 (or $11,700 with HDHP)
Net cost of additional protection: $3,600/year (or $2,400 with HDHP)
For that additional ~$3K/year, you've gained:
- $1.5M additional life insurance on Partner A (beyond employer)
- $1.2M additional life insurance on Partner B
- $84K/year disability income replacement on Partner B (the biggest gap)
- $2M umbrella liability protection
- Upgraded auto liability limits
High-ROI changes.
Key Takeaways
- Biggest single fix: Surrender the whole life policy. Save $4,560/year. Take $42K cash value. Redirect premiums to term + disability + umbrella. Whole life was a bad product, not a bad decision to stop.
- Biggest single gap: Partner B has NO disability insurance. $84K/year individual LTD coverage is urgent — execute within 60 days. ~$2,000/year premium.
- Life insurance adequacy: Partner A needs $2M term (currently $500K employer + whole life), Partner B needs $1.5M term (currently $300K employer). Kids are 5 and 8 — 20-year term covers them to college graduation.
- Liability exposure: $1.2M net worth + no umbrella + auto liability at 100/300 = significantly exposed. Umbrella $2M ($400/year) + auto upgrade to 250/500 ($200/year) = $600/year for $2M+ protection. Asymmetric insurance.
- Timeline: 10-week implementation. Get new coverage BEFORE dropping whole life. Never cancel old coverage before new is in force. CPA review on whole life surrender for potential tax implications.
Common use cases
- New homeowners auditing complete coverage
- New parents adding life + disability coverage
- Mid-career professionals whose coverage hasn't been reviewed in 5+ years
- High earners re-calibrating liability + umbrella protection
- Freelancers + self-employed navigating private insurance markets
- Pre-retirees evaluating Medicare transition + long-term care
- Couples consolidating policies after marriage
- People with significant assets (>$1M net worth) assessing liability exposure
- Anyone who just got a life-insurance pitch they're not sure about
Best AI model for this
Claude Opus 4 or Sonnet 4.5. Insurance analysis requires risk reasoning + financial math + product-nuance simultaneously. Top-tier reasoning matters. Not insurance advice — consult a licensed broker for your specific purchase decisions.
Pro tips
- TERM life, not WHOLE life. Whole life is wrapped investment + insurance with 5-15% effective returns after fees — terrible. Term life is 10-15x cheaper for same coverage. Invest the difference in index funds.
- Life insurance amount = 10x income + cover kids to college + mortgage payoff. For most earners with kids, that's $500K-$2M. Get 20-year or 30-year level term.
- Long-term disability is under-bought. Your ability to earn income is your largest asset by far. 70% of 30-year-olds will experience a disability >90 days before age 65. Get 60-70% income replacement coverage.
- Auto liability should equal your net worth (minimum) or 2x net worth. Standard policy at 50/100/50 or 100/300/100 is inadequate if you have $500K+ net worth. Raise to 250/500/250 and add umbrella.
- Umbrella insurance is cheap ($250-500/year for $1-2M coverage). If net worth >$250K, get it. Lawsuit above auto/home policy limits goes to umbrella first — then to your assets. This is asymmetric protection.
- Homeowners policy: verify replacement cost (not cash value) for structure + contents. Add flood insurance separately if in any flood-zone risk. Auto-increase coverage for inflation.
- Health insurance: HDHP + HSA is almost always right for healthy households. Triple tax advantage on HSA + lower premiums. Only prefer traditional if you have significant ongoing medical costs.
- Avoid these 4: (1) Whole life insurance, (2) Credit card/bank 'life insurance' add-ons, (3) Extended warranties on electronics, (4) Mortgage life insurance (standard life insurance is better + more flexible).
Customization tips
- Never buy insurance from someone who sells that insurance. Agents have commission incentives. Fee-only insurance advisors exist — they charge $500-$2,000 for comprehensive review, no product sales. Worth it for families $500K+ net worth.
- Level term (20/30-year) beats 'decreasing term' — you want coverage to stay at $2M, not decrease yearly. Small premium difference for meaningful security.
- Disability insurance is the most under-bought essential coverage. Young people think 'it won't happen to me' — statistically, 1 in 4 will experience a >90-day disability before retirement. Buy while young + healthy — rates lock in.
- Review umbrella coverage every time net worth grows by $500K. Same $1M umbrella that was adequate at $800K net worth is inadequate at $1.5M. Scale with wealth.
- Keep a 'coverage inventory' spreadsheet with: policy name, carrier, coverage, premium, renewal date, contact info. Share with partner. Prevents confusion during a claim or at coverage-renewal time.
Variants
New Parent Mode
For newly-minted parents. Emphasizes term life for both partners, disability, life insurance for at-home parent's economic value.
High Net Worth Mode
For $1M+ net worth. Emphasizes umbrella, asset protection, liability limits, potential permanent life insurance for estate considerations.
Self-Employed Mode
For freelancers and small business owners. Emphasizes individual disability coverage, business liability, health insurance market navigation.
Pre-Retirement Mode
For people 5-10 years from retirement. Emphasizes long-term care planning, Medicare transition, life insurance re-evaluation.
Frequently asked questions
How do I use the Insurance Coverage Audit — What You Actually Need, Not What Agents Sell prompt?
Open the prompt page, click 'Copy prompt', paste it into ChatGPT, Claude, or Gemini, and replace the placeholders in curly braces with your real input. The prompt is also launchable directly in each model with one click.
Which AI model works best with Insurance Coverage Audit — What You Actually Need, Not What Agents Sell?
Claude Opus 4 or Sonnet 4.5. Insurance analysis requires risk reasoning + financial math + product-nuance simultaneously. Top-tier reasoning matters. Not insurance advice — consult a licensed broker for your specific purchase decisions.
Can I customize the Insurance Coverage Audit — What You Actually Need, Not What Agents Sell prompt for my use case?
Yes — every Promptolis Original is designed to be customized. Key levers: TERM life, not WHOLE life. Whole life is wrapped investment + insurance with 5-15% effective returns after fees — terrible. Term life is 10-15x cheaper for same coverage. Invest the difference in index funds.; Life insurance amount = 10x income + cover kids to college + mortgage payoff. For most earners with kids, that's $500K-$2M. Get 20-year or 30-year level term.
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