New Jersey Life Producer Law Practice Test

What should clients focus on in a policy illustration?

1. Agent qualifications

2. Projected policy performance

3. Market competition

4. Premiums paid by other customers

The correct answer is: Projected policy performance

Clients should focus on projected policy performance in a policy illustration because this aspect gives a forecast of how the insurance policy is expected to perform over time. A policy illustration typically includes information such as cash value accumulation, death benefit projections, and dividend estimates, which are critical for understanding the long-term benefits and costs associated with the policy. By examining this projected performance, clients can assess whether the policy aligns with their financial goals and needs. In addition, evaluating projected policy performance allows clients to make informed decisions regarding their insurance coverage. It helps them compare different policies and choose one that offers the best overall value tailored to their situation.