Following the narrative summary, a basic illustration must include a numeric summary of the death benefits and values and the premium outlay and contract premium, as applicable. For a policy that provides for a contract premium, the guaranteed death benefits and values must be based on the contract premium. This summary must be shown for at least policy years 5, 10 and 20 and at age 70, if applicable, on the three bases listed in this section. For multiple life policies the summary must show policy years 5, 10, 20 and 30. The three bases are as follows:

1. (1) Policy guarantees;
2. (2) Insurer’s illustrated scale;

3. (3) Insurer’s illustrated scale used but with the nonguaranteed elements reduced as follows:

   1. (a) Dividends at 50 percent of the dividends contained in the illustrated scale used;
   2. (b) Nonguaranteed credited interest at rates that are the average of the guaranteed rates and the rates contained in the illustrated scale used; and

   3. (c) All nonguaranteed charges, including charges for term insurance, mortality, and expenses, at rates that are the average of the guaranteed rates and the rates contained in the illustrated scale used.

      In addition, if coverage would cease prior to policy maturity or age 100, the year in which coverage ceases must be identified for each of the three bases.

Source: 23 SDR 228, effective July 1, 1997.

General Authority: SDCL 58-33-5.1.

Law Implemented: SDCL 58-33-5.1.