What Fiduciaries Need to Know about Life Insurance Illustrations in Relationship to their Fiduciary Duties
Here we explore the complexities of life insurance illustrations, emphasizing the fiduciary responsibilities of advisors. We discuss the importance of understanding policy performance, the risks associated with indexed universal life insurance, and the necessity of independent modeling to ensure clients’ financial security. The presentations highlight common misconceptions and provides insights into the implications of poorly structured policies.
These discussions, based on a recent presentation by Bill Boersma and Steven Zeiger at the 2026 Heckerling conference, explores what fiduciaries need to understand before relying on life insurance illustrations. From common misconceptions around IUL performance to the critical role of independent modeling, the goal is simple: move beyond the sales narrative and toward a more disciplined, defensible decision-making process.
Life insurance illustrations are often treated as definitive roadmaps, but for fiduciaries, they should be approached more like hypotheses than guarantees. The numbers look precise, the projections feel structured, and the outcomes appear predictable. Yet beneath the surface, these illustrations are built on assumptions that can materially impact long-term results, and, more importantly, fiduciary liability.
In today’s environment, where indexed universal life policies are widely used in advanced planning strategies, the gap between illustration and actual performance has become increasingly difficult to ignore. Fiduciaries are not just evaluating a product—they are evaluating the credibility of the assumptions behind it, the risks embedded within it, and the consequences if those assumptions fail.
