Policy illustrations must include all of the following EXCEPT

Policy illustrations must include all of the following EXCEPT

• A. They are clearly labeled as illustrative.
• B. They show the assumptions used.
• C. They disclose the basis for any projected numbers.
• D. They guarantee future performance.

Answer: (D)

Policy illustrations are meant to help consumers understand potential outcomes under a contract, not to promise or guarantee those outcomes. They must be clearly labeled as illustrative so it’s clear these numbers are examples, and they must show the assumptions used so you can see what the projections depend on. They also need to disclose the basis for any projected numbers so the math and reasoning behind the figures are transparent. Because actual results depend on many changing factors—like investment performance, policy charges, premium timing, and loans—illustrations cannot and should not guarantee future performance. That’s why the statement about guaranteeing future performance is the one that does not belong.

Policy illustrations are meant to help consumers understand potential outcomes under a contract, not to promise or guarantee those outcomes. They must be clearly labeled as illustrative so it’s clear these numbers are examples, and they must show the assumptions used so you can see what the projections depend on. They also need to disclose the basis for any projected numbers so the math and reasoning behind the figures are transparent. Because actual results depend on many changing factors—like investment performance, policy charges, premium timing, and loans—illustrations cannot and should not guarantee future performance. That’s why the statement about guaranteeing future performance is the one that does not belong.