What is the primary function of life insurance illustrations?

The primary function of life insurance illustrations is to present the potential future values and benefits of a policy. These illustrations provide a comprehensive overview of how a life insurance policy may perform over time, considering factors such as premiums, potential cash value growth, dividends (if applicable), and death benefits. By utilizing assumptions based on current interest rates and mortality costs, illustrations help policyholders understand the long-term financial implications and advantages of the insurance product they are considering.

This information is crucial for individuals making informed decisions about their life insurance options. It allows them to visualize how their investment will grow and what benefits the policy would provide to beneficiaries in the event of the insured's death. Understanding these projections helps clients align their insurance choices with their financial goals and needs.

While other aspects of insurance policies, such as market values, exclusions, and legal requirements, are important in the complete context of a policy, they do not play the central role that illustrations do in conveying the expected performance and benefits of life insurance products.