View INSTANT Quotes

Policy Illustration

Policy Illustration is a detailed document that provides a visual projection of a life insurance policy’s potential performance, including premiums, cash value, and death benefits.

What is Policy Illustration?

Policy Illustration is an important document provided by insurance companies to prospective buyers of life insurance. It offers a comprehensive projection of how a life insurance policy, such as Whole Life, Indexed Universal Life (IUL), or Universal Life, is expected to perform over time. This includes estimates of premium payments, cash value accumulation, death benefits, and potential dividends, depending on the policy type.

The illustration typically shows a range of scenarios, including guaranteed values based on the minimum interest rates or benefits and non-guaranteed values based on assumptions like current interest rates, dividends, and market performance. These projections help policyholders understand how their policy might perform in different financial environments and make informed decisions based on their financial goals.

For example, a Policy Illustration for an IUL might demonstrate how the cash value grows under various market conditions and highlight the impact of policy loans, withdrawals, or changes in premiums. It is a critical tool for comparing policies, as it shows the potential financial outcome of choosing one policy type over another.

Policy Illustrations are especially valuable for individuals seeking clarity on the long-term implications of a policy, allowing them to anticipate how future changes might impact the policy’s value and benefits.