Question

A life insurance illustration showing future premiums being paid out of non-guaranteed values must disclose that:

A) The premiums are guaranteed not to increase.
B) The policy will be paid up in full after a certain number of years.
C) The illustration is for illustrative purposes only and is not guaranteed.
D) The non-guaranteed values are based on the insured's health status.

Answer 1

When a life insurance illustration shows future premiums being paid out of non-guaranteed values, it is important to disclose that the illustration is for illustrative purposes only and is not guaranteed. The insurance company cannot guarantee that the premiums will not increase or that the policy will be paid up in full after a certain number of years.

Step-by-step explanation:

When a life insurance illustration shows future premiums being paid out of non-guaranteed values, it is important to disclose that the illustration is for illustrative purposes only and is not guaranteed. This means that the values shown in the illustration may not actually be achieved in reality. The insurance company cannot guarantee that the premiums will not increase or that the policy will be paid up in full after a certain number of years. Additionally, the non-guaranteed values are not based on the insured's health status, but rather on various factors such as investment income earned on reserves and administrative costs.