Illinois Administrative Code › Title 50 - INSURANCE › Part 1406 - INDIVIDUAL AND GROUP LIFE INSURANCE POLICY ILLUSTRATIONS › Section 1406.50 - Standards for Basic Illustrations

Current through Register Vol. 48, No. 28, July 12, 2024
a)
			 Format. A basic illustration shall conform with the following requirements:
1) The illustration shall be labeled with the
			 date on which it was prepared.
2)
			 Each page, including any explanatory notes or pages, shall be numbered and show
			 its relationship to the total number of pages in the illustration (e.g., the
			 fourth page of a seven-page illustration shall be labeled "page 4 of 7
			 pages").
3) The assumed dates of
			 payment receipt and benefit pay-out within a policy year shall be clearly
			 identified.
4) If the age of the
			 proposed insured is shown as a component of the tabular detail, it shall be
			 issue age plus the numbers of years the policy is assumed to have been in
			 force.
5) The assumed payments on
			 which the illustrated benefits and values are based shall be identified as
			 premium outlay or contract premium, as applicable. For policies that do not
			 require a specific contract premium, the illustrated payments shall be
			 identified as premium outlay.
6)
			 Guaranteed death benefits and values available upon surrender, if any, for the
			 illustrated premium outlay or contract premium shall be shown and clearly
			 labeled guaranteed.
7) If the
			 illustration shows any non-guaranteed elements, they cannot be based on a scale
			 more favorable to the policy owner than the insurer's illustrated scale at any
			 duration. These elements shall be clearly labeled non-guaranteed.
8) The guaranteed elements, if any, shall be
			 shown before corresponding non-guaranteed elements and shall be specifically
			 referred to on any page of an illustration that shows or describes only the
			 non-guaranteed elements (e.g., "see page one for guaranteed
			 elements").
9) The account or
			 accumulation value of a policy, if shown, shall be identified by the name this
			 value is given in the policy being illustrated and shown in close proximity to
			 the corresponding value available upon surrender.
10) The value available upon surrender shall
			 be identified by the name this value is given in the policy being illustrated
			 and shall be the amount available to the policy owner in a lump sum after
			 deduction of surrender charges, policy loans and policy loan interest, as
			 applicable.
11) Illustrations may
			 show policy benefits and values in graphic or chart form in addition to the
			 tabular form.
12) Any illustration
			 of non-guaranteed elements shall be accompanied by a statement indicating that:
A) The benefits and values are not
			 guaranteed;
B) The assumptions on
			 which they are based are subject to change by the insurer; and
C) Actual results may be more or less
			 favorable.
13) If the
			 illustration shows that the premium payer may have the option to allow policy
			 charges to be paid using non-guaranteed values, the illustration must clearly
			 disclose that a charge continues to be required and that, depending on actual
			 results, the premium payer may need to continue or resume premium outlays.
			 Similar disclosure shall be made for premium outlay of lesser amounts or
			 shorter durations than the contract premium. If a contract premium is due, the
			 premium outlay display shall not be left blank or show zero unless accompanied
			 by an asterisk or similar mark to draw attention to the fact that the policy is
			 not paid up.
14) If the applicant
			 plans to use dividends or policy values, guaranteed or non-guaranteed, to pay
			 all or a portion of the contract premium or policy charges, or for any other
			 purpose, the illustration may reflect those plans and the impact on future
			 policy benefits and values.