Is the Record of Advice different for life insurance?

The FAIS duty is the same, but life advice turns on the amount, term and structure of cover matching a documented need — and replacement of existing cover carries extra scrutiny, so the ROA must record the comparison and the client’s understanding of it.

What must a replacement Record of Advice show?

That the client was told what they give up (accrued benefits, new waiting periods, fresh underwriting) and the reasons the replacement is still in their interest — with the comparison recorded.

Can Broker AI compare an existing policy to the recommendation?

Yes — upload the existing-policy documents and it structures the comparison the replacement ROA needs, alongside the recommendation.

How do I justify the sum assured I recommended?

Show the calculation. Outstanding debt, dependants’ living costs to a stated age, education, final expenses and any estate-duty estimate are the usual components — and where the client chose less cover than the analysis indicated, record the shortfall and the reason.

Does the premium pattern belong in the Record of Advice?

Yes. A level premium and an age-rated one are materially different for the client over thirty years, and an escalating premium is a common reason cover lapses later in life. Record which was recommended, why, and the affordability discussion.

What should the ROA say about non-disclosure?

That the client was told an incomplete or inaccurate answer on a material matter can affect a future claim, and that the application answers are the client’s own. If you complete the form for the client, which section 7(1)(d)(ii) of the Code allows, read the answers back and have the client confirm them.

How long must a life Record of Advice be kept?

Five years under section 3(2) of the General Code of Conduct, running from termination of the product or rendering of the service — so on a long-term policy the record has to outlive every review along the way, not just the original sale.

/ LROAGUIDE

Record of Advice for life & long-term insurance

For life and long-term insurance, the Record of Advice has to connect a needs analysis to the cover recommended — the amount, the term, the structure and the replacement implications. The FAIS duty is the same one section 9 of the General Code imposes on every adviser; what differs is that the recommendation is a set of numbers the client cannot check, so each one has to be traceable to a need you identified. Here is what a life ROA should cover to meet the Code, where these files commonly fall short, and how Broker AI drafts one from the client’s documents.

Updated 19 September 2026

What a life / long-term ROA must record

01The needs identified — income protection, debt cover, dependants’ needs, estate liquidity — and how each amount was calculated.
02The product(s) recommended, the sum assured, term and premium pattern, and why the structure suits the need.
03Any replacement of existing cover: the comparison, the costs of replacing, and why it is in the client’s interest.
04Disclosures: exclusions, waiting periods, premium escalations and the consequences of non-disclosure.

Every amount needs a calculation behind it

The distinctive weakness of life files is a sum assured that appears from nowhere. R 4 million of life cover is either a number derived from something — outstanding bond, dependants’ living costs to a stated age, education to matric, final expenses, an estate-duty estimate — or it is a number the client will one day be told was wrong. Recording the arithmetic is not a formality: it is the only thing that lets a claim conversation, or an Ombud, distinguish a considered recommendation from a round figure. Where a client chose less cover than the analysis indicated, that is legitimate and common, and the shortfall and the reason for it belong in the record too.

Term and premium pattern are part of the recommendation

Life advice is the one place where a product can be suitable today and unaffordable in year twelve, so the structure carries as much weight as the sum. The ROA should say why the term matches the need it covers — bond cover to the end of the bond, income protection to retirement age, education cover to the youngest child’s matric — and what premium pattern was recommended. A level premium and an age-rated one are different products from the client’s side: one costs more now, the other escalates and is the common reason cover lapses in the client’s fifties, exactly when it is most needed. Record which was chosen and why, including the affordability conversation.

Replacement — the highest-scrutiny area

Replacing an existing life policy attracts specific FAIS scrutiny. The Record of Advice must show the client understood what they gave up (accrued benefits, new waiting periods, new underwriting) and why the replacement still serves them.

What "understood what they gave up" actually has to list

Replacement is where files commonly fail, and they fail on omission rather than on the merits. A defensible replacement record names each of these explicitly, and says whether it counts against the replacement or does not apply:

01Accrued benefits, guarantees or loyalty bonuses on the existing policy that do not carry across.
02Fresh underwriting — the client is a different age with a different health history, so the new premium and any new exclusion is priced on today’s life, not the original one.
03New waiting or exclusion periods that restart, including any suicide or specified-condition exclusions.
04The cost of replacing: new initial charges, the commission position, and any penalty or surrender value on the policy being cancelled.
05The gap risk — that the existing policy must not be cancelled until the new one is on risk, and who is responsible for confirming that it is.

Non-disclosure: the disclosure the client will be judged on

On a long-term risk policy the consequence of an incomplete answer at application falls on the client years later, at claim stage. So the ROA has to record that the client was told what non-disclosure of a material matter can do to a claim — and that the application answers are theirs. Section 7(1)(d)(ii) of the Code accepts that you may complete or submit the form for the client — but if you do, read each medical and lifestyle answer back to the client and have them confirm it, rather than filling it in from memory of an earlier conversation. Otherwise the answer is in effect yours, and the file has no way to show otherwise.

Beneficiaries, cession and where the money lands

A life recommendation that is correct in amount can still fail in destination. If the cover exists to settle a bond the bank has ceded, to fund an estate-duty liability, or to keep a business running after a partner dies, the ownership and beneficiary structure is part of the advice — and so is the effect on the estate. Record the nomination or cession recommended, and whether the proceeds fall inside or outside the estate for the purpose the client described. Where the client took different structuring advice from an attorney or accountant, note that too: it explains a file that otherwise looks inconsistent with its own analysis.

Reviews, and keeping the file

Life needs move with the life — a bond is repaid, a child finishes school, a salary doubles, a divorce changes the dependants. An ROA is a snapshot of the advice on its date, so a review that finds nothing to change is still worth a dated note, and one that finds something is a new advice event with its own record. Under section 3(2) of the General Code of Conduct the advice record must be retained for five years, running from the termination of the product or the rendering of the service — which on a thirty-year life policy means the whole chain of reviews, not only the original sale.

Draft a life ROA from the client documents

Broker AI reads the needs analysis and existing-policy documents you upload, structures the recommendation and — where cover is being replaced — the comparison, and drafts a Record of Advice you review and finalise. Built for South African brokers.

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Frequently asked questions

Is the Record of Advice different for life insurance?: The FAIS duty is the same, but life advice turns on the amount, term and structure of cover matching a documented need — and replacement of existing cover carries extra scrutiny, so the ROA must record the comparison and the client’s understanding of it.
What must a replacement Record of Advice show?: That the client was told what they give up (accrued benefits, new waiting periods, fresh underwriting) and the reasons the replacement is still in their interest — with the comparison recorded.
Can Broker AI compare an existing policy to the recommendation?: Yes — upload the existing-policy documents and it structures the comparison the replacement ROA needs, alongside the recommendation.
How do I justify the sum assured I recommended?: Show the calculation. Outstanding debt, dependants’ living costs to a stated age, education, final expenses and any estate-duty estimate are the usual components — and where the client chose less cover than the analysis indicated, record the shortfall and the reason.
Does the premium pattern belong in the Record of Advice?: Yes. A level premium and an age-rated one are materially different for the client over thirty years, and an escalating premium is a common reason cover lapses later in life. Record which was recommended, why, and the affordability discussion.
What should the ROA say about non-disclosure?: That the client was told an incomplete or inaccurate answer on a material matter can affect a future claim, and that the application answers are the client’s own. If you complete the form for the client, which section 7(1)(d)(ii) of the Code allows, read the answers back and have the client confirm them.
How long must a life Record of Advice be kept?: Five years under section 3(2) of the General Code of Conduct, running from termination of the product or rendering of the service — so on a long-term policy the record has to outlive every review along the way, not just the original sale.

This page is general information about FAIS record-keeping, not legal or compliance advice.