Illustrations - Purpose

  • What is the purpose of policy illustrations?

1988 - SOA - Are Current Illustrations Supportable?, Society of Actuaries - 20p

  • In my opinion, illustrations are just a sales aid, almost like an advertisement in the newspaper.

--  Mahir Dugentas  

1995 - SOA - Current Developments Surrounding Regulations and Standards of Life and Annuity Products, Society of Actuaries - 18p

  • We believe consumers would benefit from the inclusion of a discussion of NGEs in the buyer’s guide, and think the following points would be helpful:
    • Products with NGEs have the risk that costs could increase or benefits could decrease, subject to guaranteed limits stated in the policy.
    • Illustrations, if available during the purchasing process, can be useful tools to help consumers understand a range of possible product performance outcomes.
      • [Bonk: NGEs - Non-Guaranteed Elements - Performance / Benefits - Universal Life = Coverage Period, Protection Period, Duration, Term of Years in Force - Variable Life = Death Benefit Amount]

2017 1019 - Letter - AAA to NAIC (LIBGWG) - Life Insurance Buyer's Guide Working Group - Non-Guaranteed Elements Work Group of the American Academy of Actuaries - 2p

  • We continue to put out these apples vs. oranges illustrations.
    • We're misleading our policyholders.
    • We are providing the ammunition to make replacements of inforce policies with new coverage that is not in the policyowner's best interest.

--  Walter Miller

1983 - SOA - Surplus Distribution and Allocation for New and Inforce Policies - 22p

  • https://www.bonknote.com/2013-1211-doc-735-2-deposition-of-michael-tivilini-215p/
    • THE WITNESS: I mean, it's one of the things you would look at. Certainly, life insurance illustrations are, you know, one way of showing how the policy is going to behave under a certain set of assumptions.
    • Q BY MR. FOSTER: Are there any documents besides life  insurance illustrations that consumers were provided with that show how the policy will behave under a particular set of circumstances?
    • MR. PERLA: Objection.
    • THE WITNESS: I don't believe so, no. (p119)