In the context of life and/or living benefits insurance, a “policy illustration” is a document provided to the consumer to demonstrate how an insurance policy functions based on specific selections and assumptions. It shows potential outcomes and benefits assuming no changes in the assumptions and timely premium payments. The illustration is educational and not a contract, application, or guarantee of future performance. Coverage availability and premiums will be determined during underwriting and detailed in the issued policy.
Key aspects of policy illustration include:
Informative purpose
Designed to educate consumers about policy workings.
Assumptions-based
Based on specific, unchanged assumptions over the illustrated period.
Non-binding
Not a contract or guarantee of future performance.
Underwriting-dependent
Final coverage and premiums are determined during underwriting.