Policy Illustration

a key document (which may be shown to a consumer on computer or in hard copy) that is used in the sale of a Cash Value Life Insurance Policy that shows an example of how the policy would perform financially given certain criteria. Specifically, it shows how the Accumulated Cash Value and Cash Surrender Value would develop over time based upon assumptions stated in the Illustration concerning levels of Fees and Crediting Rates. Technically, as defined in the NAIC’s Life Insurance Illustrations Model Regulation, an illustration is “a presentation or depiction that includes nonguaranteed elements of a life insurance policy over a period of years.” “Nonguaranteed elements” may include premiums, benefits, values, credits, or charges so long as the amount of the element is not guaranteed by the policy. If an insurance company chooses to market a particular policy design using an Illustration, which they almost always do, then every policy owner must receive an Illustration and must sign it.