What is a life illustration?
A life insurance illustration is a document that estimates how a prospective insurance policy will perform over the course of its coverage. Illustrations are used to inform potential policyholders and help agents in their sales process.
What does illustration mean in a life insurance policy?
An illustration is a presentation or depiction provided to prospective or new policy owners that shows how the policy should perform under specific circumstances set out in the illustration.
What does an inforce illustration look like?
Commonly, the inforce illustration will include two scenarios, one using the current interest rate and one using the lowest guaranteed interest rate. Your illustration should show your annual premium and may also show how your cumulative premium increases from year to year.
What is the cash surrender value?
The cash surrender value is the sum of money an insurance company pays to a policyholder or an annuity contract owner if their policy is voluntarily terminated before its maturity or an insured event occurs. Cash value is the amount of equity in a policy against which a loan can be made.
What does liquidity mean in a life insurance policy?
cash
With respect to life insurance, liquidity refers to how easily you can access cash from the policy. The concept applies mostly to permanent life insurance, because it accumulates cash value over time. Term life insurance doesn’t have that cash-value component.
What is illustration in policy?
A policy illustration shows how the policy’s value is expected to change over time and what assumptions those values are based on. The actual legal guarantees associated with the policy are contained in the policy’s contract.
How do you explain policy illustration?
A policy illustration shows how the policy’s value is expected to change over time and what assumptions those values are based on. A disability policy illustration will also show the waiting period before benefits become payable and describe the conditions that must be met for the policy to payout.
Which of the following is a key distinction between variable whole life?
Which of the following is a key distinction between variable whole life and variable universal life products? A Variable whole life allows policy loans from the cash value. Variable whole life has a guaranteed death benefit.