https://www.insurerbrain.com/w/index.php?action=history&feed=atom&title=Definition%3APolicy_illustration 2026-04-30T10:55:53Z Revision history for this page on the wiki MediaWiki 1.43.8 https://www.insurerbrain.com/w/index.php?title=Definition:Policy_illustration&diff=11586&oldid=prev 2026-03-12T00:17:20Z

<p>Bot: Creating new article from JSON</p> <p><b>New page</b></p><div>📊 &#039;&#039;&#039;Policy illustration&#039;&#039;&#039; is a projection document provided to prospective or existing [[Definition:Policyholder | policyholders]] that shows how a [[Definition:Life insurance | life insurance]] or [[Definition:Annuity | annuity]] policy is expected to perform over time under various assumptions. Typically used in the sale of [[Definition:Whole life insurance | whole life]], [[Definition:Universal life insurance | universal life]], and [[Definition:Variable life insurance | variable life]] products, it lays out anticipated [[Definition:Premium | premiums]], [[Definition:Cash value | cash values]], [[Definition:Death benefit | death benefits]], and dividends or interest credits at both guaranteed and non-guaranteed rates. Because these projections can influence purchasing decisions significantly, regulators require that illustrations follow strict formatting and disclosure standards to prevent misleading representations.<br /> <br /> ⚙️ When an [[Definition:Insurance agent | agent]] or [[Definition:Insurance broker | broker]] prepares a policy illustration, the underlying calculations draw on the [[Definition:Insurance carrier | carrier&#039;s]] current assumptions about [[Definition:Mortality rate | mortality rates]], [[Definition:Expense ratio | expense loads]], and [[Definition:Investment return | investment returns]], alongside the contractual guarantees embedded in the product. Most jurisdictions mandate compliance with model regulations — such as the NAIC Life Insurance Illustrations Model Regulation — which require a clear separation between guaranteed elements and hypothetical projections. The illustration must include a narrative summary, numeric tables running to policy maturity or a specified age, and signature lines where the applicant acknowledges that non-guaranteed values are not promises. Carriers typically generate these documents through [[Definition:Policy administration system | policy administration systems]] that ensure actuarial consistency across all scenarios presented.<br /> <br /> 💡 Accurate, well-regulated illustrations serve as a critical consumer protection mechanism in an industry where products can span decades and involve complex crediting strategies. Misleading projections were at the heart of several high-profile [[Definition:Market conduct | market conduct]] scandals in the 1990s, prompting sweeping reforms that still shape how [[Definition:Life insurance | life]] products are sold today. For [[Definition:Insurtech | insurtech]] companies modernizing the distribution process, digitizing the illustration workflow — with real-time scenario modeling and interactive dashboards — has become a key differentiator, provided the output remains compliant with state-specific disclosure rules.<br /> <br /> &#039;&#039;&#039;Related concepts:&#039;&#039;&#039;<br /> {{Div col|colwidth=20em}}<br /> * [[Definition:Cash value]]<br /> * [[Definition:Death benefit]]<br /> * [[Definition:Universal life insurance]]<br /> * [[Definition:Policy administration system]]<br /> * [[Definition:Suitability review]]<br /> * [[Definition:Market conduct]]<br /> {{Div col end}}</div>

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