What is a life insurance illustration and how do I read one?
Answered by 3 licensed agents
Answered by Jack Mayer on August 20, 2026
Broker Licensed in CA
Answered by Mark Maliwauki on August 13, 2026
Agent Licensed in ID
When I look at one, I don't just look at the monthly premium or the death benefit. I pay attention to a few key things:
• Premium: How much are you paying and for how long?
• Death benefit: How much would your beneficiaries receive if you died?
• Cash value: If it's a permanent policy, how is the cash value projected to build?
• Guaranteed vs. non-guaranteed values: This is a big one. Some numbers are guaranteed by the policy, while others are based on assumptions and aren't guaranteed to happen.
• Policy year: Look at what the policy is projected to look like 10, 20, or even 30 years down the road—not just year one.
The biggest mistake I see is looking at the illustration and assuming every number shown is guaranteed.
An illustration is a projection, not a promise of future performance.
If you're buying permanent life insurance, make sure you understand what is guaranteed, what isn't, how long you have to pay, and what happens if you stop paying.
And if the illustration doesn't make sense to you, don't be afraid to ask the agent to slow down and explain it. You should understand what you're buying before you sign the application.
Answered by David Lewis on August 21, 2026
Agent Licensed in VA
Tags: How Life Insurance Works
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