Policy annual statement is a yearly report that a life insurance company sends to policyowners summarizing the current status and performance of an in-force policy. For permanent and interest-sensitive products such as universal life, indexed universal life, variable universal life and whole life, the statement usually shows starting and ending cash values, premiums paid, policy charges, credited interest or index earnings, dividends if applicable, outstanding loans, loan interest, withdrawals and current death benefit. It may also list riders, beneficiary information, cost basis figures, and important notices about guarantees or upcoming changes. For term policies, the statement tends to be simpler, focusing on coverage amount, premium due, renewal dates and conversion options. Regulators emphasize clear, accurate policy annual statements so consumers can monitor policy health and understand how non-guaranteed elements are performing relative to expectations.

In everyday practice, the policy annual statement is a central tool for advisors conducting policy reviews and for clients tracking long-term planning strategies. Producers often ask clients to forward their statements so they can compare actual performance to original illustrations, especially for older universal life policies issued in higher interest rate eras. The statement can reveal whether underfunding, rising costs of insurance or heavy loan use are eroding policy values and shortening duration. Advisors may use this information to recommend increasing premiums, reducing face amount, restructuring loans, exercising riders or exploring rescue or replacement strategies. Trustees, business owners and premium finance lenders rely on annual statements for fiduciary reporting and collateral calculations. When explained clearly, policy annual statements help clients see life insurance as an ongoing financial asset that requires periodic monitoring rather than a set-and-forget product.