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Understanding The Sales Materials - Illustrations

If you are buying a variable life insurance policy or a variable annuity, the agent must give you a prospectus which has been approved by the Securities and Exchange Commission.

As a sales tool, insurance agents may use charts or illustrations to show how a cash surrender value policy or an annuity might function over time.

Be sure the sales illustration shows the guaranteed values based on the guaranteed interest rate the company promises to pay. Do not base your decision to buy a life insurance policy or an annuity only on projected future or current values; these are only estimates and you might receive much less than the estimate.

The illustration will show you what might happen in the future. Remember that nobody knows what will happen in the future. You may need to adjust your financial plans if the value of your life insurance policy or your annuity doesn't increase as quickly as shown in the illustration. You will be asked to sign a statement that says you understand that some or all of the numbers in the illustration are not guaranteed.

The illustration should also show the amount of money you would expect to receive if you were to surrender the policy. Any charges that can be predicted will be included in that figure. However, if you were to take out a policy loan, the unpaid balance would also be subtracted from the surrender value.

Policy illustrations must be numbered showing the total number of pages, for example, "page 3 of 8". Make sure you get all the pages of the sales illustration, including those that show guaranteed values. If the agent uses a computer to show you the illustration, make sure you get a printed copy to keep for yourself.