What must a policy illustration disclose if it shows premiums being paid from non-guaranteed values?

A policy illustration that demonstrates premiums being paid from non-guaranteed values is required to indicate that premiums may need to be resumed depending on actual results. This is crucial because non-guaranteed values, such as dividends or interest rates, can fluctuate based on the insurer's performance and various economic factors. Thus, the illustration must make it clear that the policyholder may have to resume premium payments if the non-guaranteed values do not materialize or are lower than expected. This disclosure serves to inform potential policyholders of the risks and uncertainties involved, ensuring they have a realistic understanding of their financial obligations concerning the policy.

Alternative responses do not accurately reflect the regulatory requirements for policy illustrations. Guaranteeing the availability of non-guaranteed values, focusing solely on guaranteed benefits, or excluding projections entirely would mislead policyholders regarding the nature of their insurance policies. Hence, the requirement to inform about the potential need for additional premium payments based on actual results is designed to promote transparency and informed decision-making for consumers.