An illustration of an annuity provides detailed information in graphical format about its likely performance over time, including the past, of income and growth oriented fixed indexed annuities and income and growth oriented variable annuities. It removes any uncertainty about how the annuity may fare and how much its value may change over time.
Among other things, illustrations typically showcase how the annuity performed in the latest 10 years, as well as during its best 10 years and worst 10 years. It also highlights annual surrender charges if they come into play, your annual income if you have a guaranteed income rider, and changes in the value of your enhanced death benefit if you have one.
Most illustrations also highlight annual liquidity – i.e., how much you can withdraw from your annuity penalty-free.
In addition, some annuity illustrations display what your investment would be worth, hypothetically, in different market environments.
Please see the illustration example below. This was created with a $100,000 initial premium amount for a 60-year-old male.