What is an illustration in life insurance?

• A. An illustration guarantees future policy values.
• B. An illustration is a non-guaranteed depiction of potential policy performance.
• C. An illustration is the underwriting report used for underwriting decision.
• D. An illustration is a legal contract of policy terms.

Answer: (B)

An illustration in life insurance is a non-guaranteed projection of how the policy could perform under assumed interest, dividends, and expense charges. It shows potential future values such as cash value and death benefit over time, using hypothetical assumptions that aren’t guaranteed by the contract. The important point is that these figures aren’t promises—only the policy’s guaranteed values are binding in the contract. Illustrations help compare different policies and understand how changes in assumptions might affect outcomes, but they should be read with the understanding that actual results can vary and may be higher or lower than shown.