Question 74

A basic life insurance policy illustration must include all of the following EXCEPT a statement that actual results will be as illustrated.

While a life insurance policy illustration is required to contain key definitions, the impact of riders, and a statement clarifying that it is indeed a life insurance policy, it does not need to guarantee that actual results will match the illustrations provided.

A) a definition of key terms used in the illustration.

This option is incorrect because a definition of key terms is essential in a life insurance illustration. It ensures that the policyholder understands the terminology used, which helps in making informed decisions regarding the policy.

B) the impact that riders may have on the policy values.

This option is also incorrect as it is crucial for policy illustrations to disclose how riders can affect policy values. Riders can significantly alter benefits or costs, and thus, their impact must be clearly communicated to the policyholder.

C) a statement that actual results will be as illustrated.

This is the correct choice since life insurance illustrations do not guarantee that actual results will reflect the projections shown. This statement is typically absent from illustrations to prevent misleading expectations regarding policy performance.

D) a statement that the contract is a life insurance policy.

This option is incorrect because it is necessary for the illustration to clearly state that the contract is a life insurance policy. This confirmation is important for the policyholder to understand the nature of the product they are considering.

Conclusion

In summary, option C stands out as the only statement that is not required in a life insurance policy illustration. The other options all provide vital information that helps the policyholder understand the terms, implications, and nature of the insurance policy they are evaluating. Understanding these elements is essential for informed decision-making in life insurance.