State RegulationsNY specificDifficulty 1/5
Under Reg 74, a life insurance illustration is best described as:
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Under Reg 74 (11 NYCRR Part 53-3.1 to .6), a life insurance illustration is a presentation that depicts how the policy's guaranteed elements and nonguaranteed elements — such as current dividend or interest scales — affect its benefits and values over a period of years. Its purpose is to give the consumer a realistic, regulated picture of how the policy might perform, not to promise future results.
Why the other options are wrong
- A) Nonguaranteed elements in an illustration are projections, not binding promises of future dividends.
- C) An illustration shows potential policy performance, not the insurer's finances.
- D) The illustration does not replace the buyer's guide — the two serve different disclosure purposes.
Memory hook
An illustration is a regulated picture of how the policy might perform.