Start with the policy design
Confirm insured, owner, product name, face amount, death-benefit option, planned premium and premium period. Identify riders and whether their charges appear in the values. A comparison is invalid when these inputs differ. Illustrated values do not replace the contract, including its life insurance exclusions and definitions.
The NAIC notes that illustrations commonly show benefits, premiums, expenses and benefit periods under specified circumstances.
Separate the columns
Guaranteed values use contract guarantees, which can include maximum charges and minimum crediting. Non-guaranteed values use assumptions such as current charges, dividends or credited rates. Ask which elements the insurer can change and within what limits. Flexible-premium projections deserve an additional check against universal life insurance mechanics.
Do not combine a guaranteed death benefit from one column with cash value from another as though they form one promised outcome.
Example review
A universal life illustration lasts to age 100 at current assumptions but ends at age 78 under guarantees. The buyer asks for an intermediate crediting scenario and the premium needed to maintain coverage under each path.
Stress-test the assumptions
Request lower interest or dividend assumptions, maximum charges where applicable and scenarios with planned loans or withdrawals. Check the first year an additional premium is required and whether a no-lapse guarantee has separate conditions.
For indexed products, review caps, participation rates and floors. For variable life, review prospectuses, fund expenses and negative-return scenarios.
Add this to the review
- Compare guaranteed duration.
- Mark every non-guaranteed value.
- Check surrender values and charges.
- Request an in-force illustration annually.
Use the contract and annual statements
The policy controls rights and guarantees. The illustration explains a scenario, while annual statements show actual current values. After issue, an in-force illustration starts with the policy's real position and is more useful than the original sales projection.
Keep every signed illustration and amendment. Ask for written explanations when figures or assumptions change. Compare the new in-force document with the prior year to identify a funding shortfall before it becomes an urgent lapse notice.
Mark the page where each promise changes
Use a highlighter system for guaranteed values, non guaranteed values, owner actions and policy charges. Record the premium assumed in each column and the age or year when coverage ends. A column with a level planned premium can still show the policy ending before the intended age under less favorable assumptions.
Read the narrative pages and footnotes, not only the ledger. Identify death benefit option, crediting assumptions, dividend treatment, loans, withdrawals and riders. If a revised illustration is provided before delivery, compare it with the earlier version and save both. After issue, use an in force illustration based on the actual policy values.
Add this to the review
- Label guaranteed and non guaranteed columns.
- Circle the first year more premium is needed.
- List every illustrated loan or withdrawal.
- Compare revised pages before signing delivery documents.
Example review
Reading example: A policy can show positive cash value in a current column while the guaranteed column reaches zero earlier. The reader should ask what premium or benefit change would prevent that outcome.
Read illustration columns separately
Do not combine guaranteed values and current assumptions into one expected result.
| Column or input | What it represents | How to use it |
|---|---|---|
| Guaranteed values | Contract minimums under stated conditions | Use as the baseline, then confirm all conditions |
| Non-guaranteed values | Results based on current assumptions | Stress-test with lower crediting or dividends |
| Planned premium | The illustrated payment pattern | Ask whether it is enough under less favorable assumptions |
| Loans and withdrawals | Reductions or charges applied to values | Check the effect on lapse risk and death benefit |
Sources for the checklist
Use this checklist to organize a review, then confirm each item in the application, illustration, policy or insurer record named below. Use the life insurance glossary for plain-English contract definitions.