AD Banker Comprehensive Practice Exam

Which of the following is NOT a type of illustration under the Alabama regulation governing life insurance illustrations?

1. Supplemental illustration

2. Basic illustration

3. Annualized Illustration

4. In force illustration

The correct answer is: Annualized Illustration

In the context of Alabama regulations governing life insurance illustrations, an annualized illustration is not recognized as a specific type of illustration. The regulations classify other types, such as basic illustrations, supplemental illustrations, and in-force illustrations, each serving distinct purposes in conveying the details of life insurance products to consumers. A basic illustration provides a standard format that outlines the policy's features, costs, and benefits, allowing consumers to understand how the product may perform over time under given assumptions. A supplemental illustration may be used alongside a basic illustration to provide additional projections or information that elaborates on specific aspects of the policy's performance, while an in-force illustration presents the actual values and performance of an existing policy based on current assumptions. Since "annualized illustration" does not fit within these outlined categories, it is considered the correct answer in this scenario.