Which statement is true regarding supplemental illustrations?

Which statement is true regarding supplemental illustrations?

• A. A supplemental illustration must be accompanied by or preceded by a basic illustration.
• B. A supplemental illustration may be used without any basic illustration.
• C. A supplemental illustration is optional and need not reference the base.
• D. A supplemental illustration is not allowed for any policy.

Answer: (A)

Supplemental illustrations are used to show non-guaranteed elements, like projected values, but they must be presented alongside the policy’s guaranteed, basic illustration. Presenting the supplemental material either with the basic illustration or after it provides the client with a reliable baseline to compare the non-guaranteed projections against the guaranteed figures. This pairing prevents misinterpretation and ensures the consumer sees how the projected values relate to the guaranteed components. So, the statement that a supplemental illustration must be accompanied by or preceded by a basic illustration is the correct one. It wouldn’t be appropriate to use a supplemental illustration alone, and it’s not correct to say the illustration is optional or that it need not reference the base, nor that it’s not allowed for any policy.

Supplemental illustrations are used to show non-guaranteed elements, like projected values, but they must be presented alongside the policy’s guaranteed, basic illustration. Presenting the supplemental material either with the basic illustration or after it provides the client with a reliable baseline to compare the non-guaranteed projections against the guaranteed figures. This pairing prevents misinterpretation and ensures the consumer sees how the projected values relate to the guaranteed components.

So, the statement that a supplemental illustration must be accompanied by or preceded by a basic illustration is the correct one. It wouldn’t be appropriate to use a supplemental illustration alone, and it’s not correct to say the illustration is optional or that it need not reference the base, nor that it’s not allowed for any policy.