What is the maximum hypothetical rate of return allowed in sales illustrations for variable products?

What is the maximum hypothetical rate of return allowed in sales illustrations for variable products?

• A. 8%
• B. 12%
• C. 6%
• D. 10%

Answer: (B)

The rate shown as a hypothetical return in sales illustrations for variable products is capped at 12% per year. This limit helps prevent overstating potential performance and keeps illustrations fair and not misleading, since actual returns can vary and are not guaranteed. Illustrations are meant to show a hypothetical scenario within a conservative, regulator-approved boundary, with clear disclosures that the rate is not guaranteed and that results depend on market performance.

The rate shown as a hypothetical return in sales illustrations for variable products is capped at 12% per year. This limit helps prevent overstating potential performance and keeps illustrations fair and not misleading, since actual returns can vary and are not guaranteed. Illustrations are meant to show a hypothetical scenario within a conservative, regulator-approved boundary, with clear disclosures that the rate is not guaranteed and that results depend on market performance.