New Jersey Life Producer Law Practice Test

Which information is NOT typically included in a policy illustration provided at the time of sale?

1. The names of the beneficiary

2. The premium payment schedule

3. The terms and conditions of the policy

4. The comparison of other similar policies

The correct answer is: The names of the beneficiary

A policy illustration is a document that provides a visual representation of how a life insurance policy is expected to perform over time. It typically includes projections of benefits, premiums, cash values, and other key elements, which help the potential policyholder understand what to expect from their insurance coverage. The information typically included in a policy illustration consists of the premium payment schedule, which outlines how much the policyholder will need to pay and when. It also includes the terms and conditions of the policy, detailing the various aspects of the insurance contract, such as coverage amounts, exclusions, and riders. Additionally, policy illustrations may compare the proposed policy with other similar policies to provide the consumer with insight into how the options stack up against each other in terms of benefits and costs. However, the names of the beneficiaries are generally not included in policy illustrations. This information is considered sensitive personal data that may not be relevant to the overall performance illustration provided at the time of sale. Consequently, focusing a policy illustration on financial projections and comparisons, rather than on the specific details of beneficiaries, helps maintain clarity and relevance in the information presented to potential buyers.