Illustrated rate is the interest or crediting rate used in life insurance or annuity illustrations to project future cash values, death benefits, or account balances. For indexed and variable products, regulators and carriers impose caps and guidelines on maximum illustrated rates to prevent overly optimistic projections. The illustrated rate is not a guarantee; actual performance may be higher or lower based on interest rates, index returns, or subaccount results. Understanding illustrated rates is critical for interpreting long-term projections realistically.

Advisors choose illustrated rates within carrier and regulatory limits when preparing proposals, often showing multiple scenarios at different rates to highlight variability. Compliance departments review illustrations for adherence to company standards and disclosure requirements. Advisors explain to clients that illustrated rates are assumptions, not promises, and that policy performance should be monitored over time. Understanding illustrated rates helps advisors avoid overselling and fosters more transparent conversations about uncertainty in non-guaranteed elements.