What elements are typically displayed in a policy illustration?

What elements are typically displayed in a policy illustration?

• A. Policyholder's personal information and payment history
• B. Details on underwriting standards and requirements
• C. Premiums, death benefits, and cash value growth projections
• D. Information on excluded risks and coverage limits

Answer: (C)

In a policy illustration, the primary focus is on presenting the financial aspects of an insurance policy in a clear and understandable format. This typically includes information about premiums, which are the payments made to maintain the coverage; death benefits, which are the amounts payable to beneficiaries upon the policyholder's death; and cash value growth projections, which illustrate how the policy's cash value accumulates over time, particularly for permanent life insurance products. These components help potential policyholders understand the future value and benefits of the policy they are considering. While personal information and payment history, underwriting details, and exclusions might be relevant to the insurance policy in general, they do not encapsulate the core financial projections and benefits that a policy illustration aims to highlight. Thus, the focus on premiums, death benefits, and cash value growth projections is essential in helping customers make informed decisions about their life insurance options.

In a policy illustration, the primary focus is on presenting the financial aspects of an insurance policy in a clear and understandable format. This typically includes information about premiums, which are the payments made to maintain the coverage; death benefits, which are the amounts payable to beneficiaries upon the policyholder's death; and cash value growth projections, which illustrate how the policy's cash value accumulates over time, particularly for permanent life insurance products. These components help potential policyholders understand the future value and benefits of the policy they are considering.

While personal information and payment history, underwriting details, and exclusions might be relevant to the insurance policy in general, they do not encapsulate the core financial projections and benefits that a policy illustration aims to highlight. Thus, the focus on premiums, death benefits, and cash value growth projections is essential in helping customers make informed decisions about their life insurance options.