376.704.  Definitions. — For the purposes of sections 376.700 to 376.714, the following definitions shall apply:

  (1)  "Buyer's guide", a document which contains, and is limited to, the language contained in section 376.714 or language approved by the director of the department of commerce and insurance;

  (2)  "Cash dividend", the current illustrated dividend which can be applied toward payment of the gross premium;

  (3)  "Equivalent level annual dividend", a calculation made by applying the following steps:

  (a)  Accumulate the annual cash dividends at five percent interest, or other interest rate approved by the director of the department of commerce and insurance, compounded annually to the end of the tenth and twentieth policy years;

  (b)  Divide each accumulation of (a) by an interest factor that converts it into one equivalent level annual amount that, if paid at the beginning of each year, would accrue to the values in (a) over the respective periods stipulated in (a).  If the period is ten years, the factor is 13.207 and if the period is twenty years, the factor is 34.719;

  (c)  Divide the results of (b) by the number of thousands of the equivalent level death benefit to arrive at the equivalent level annual dividend;

  (4)  "Equivalent level death benefit", an amount calculated as follows:

  (a)  Accumulate the guaranteed amount payable upon death, regardless of the cause of death, at the beginning of each policy year for ten and twenty years at five percent interest, or other interest rate approved by the director of the department of commerce and insurance, compounded annually to the end of the tenth and twentieth policy years respectively;

  (b)  Divide each accumulation of (a) by an interest factor that converts it into one equivalent level annual amount that, if paid at the beginning of each year, would accrue to the value in (a) over the respective periods stipulated in (a).  If the period is ten years, the factor is 13.207 and if the period is twenty years, the factor is 34.719.

  (5)  "Generic name", a short title which is descriptive of the premium and benefit patterns of a policy or a rider;

  (6)  "Life insurance cost indexes":

  (a)  "Life insurance surrender cost index", a calculation made by applying the following steps:

  a.  Determine the guaranteed cash surrender value, if any, available at the end of the tenth and twentieth policy years;

  b.  For participating policies, add the terminal dividend payable upon surrender, if any, to the accumulation of the annual cash dividends at five percent interest, or other interest rate approved by the director of the department of commerce and insurance, compounded annually to the end of the period selected and add this sum to the amount determined in step a;

  c.  Divide the result of step b. (step a. for guaranteed-cost policies) by an interest factor that converts it into an equivalent level annual amount that, if paid at the beginning of each year, would accrue to the value in step b. (step a. for guaranteed-cost policies) over the respective periods stipulated in step a.  If the period is ten years, the factor is 13.207 and if the period is twenty years, the factor is 34.719;

  d.  Determine the equivalent level premium by accumulating each annual premium payable for the basic policy or rider at five percent interest, or other interest rate approved by the director of the department of commerce and insurance, compounded annually to the end of the period stipulated in step a.  and dividing the result by the respective factors stated in step c.  (This amount is the annual premium payable for a level premium plan.);

  e.  Subtract the result of step c. from step d.;

  f.  Divide the result of step e. by the number of thousands of the equivalent level death benefit to arrive at the life insurance surrender cost index;

  (b)  "Life insurance net payment cost index", a calculation made in the same manner as the comparable life insurance cost index except that the cash surrender value and any terminal dividend are set at zero;

  (7)  "Policy summary", for the purposes of sections 376.700 to 376.714, policy summary means a written statement describing the elements of the policy including but not limited to:

  (a)  A prominently placed title as follows:

STATEMENT OF POLICY COST AND BENEFIT INFORMATION;

  (b)  The name and address of the insurance agent, or, if no agent is involved, a statement of the procedure to be followed in order to receive responses to inquiries regarding the policy summary;

  (c)  The full name and home office or administrative office address of the company in which the life insurance policy is to be or has been written;

  (d)  The generic name of the basic policy and each rider;

  (e)  The following amounts, where applicable, for the first five policy years and representative policy years thereafter sufficient to clearly illustrate the premium and benefit patterns, including, but not necessarily limited to, the years for which life insurance cost indexes are displayed and at least one age from sixty through sixty-five or maturity whichever is earlier:

  a.  The annual premium for the basic policy;

  b.  The annual premium for each optional rider;

  c.  Guaranteed amount payable upon death, at the beginning of the policy year regardless of the cause of death other than suicide, or other specifically enumerated exclusions, which is provided by the basic policy and each optional rider, with benefits provided under the basic policy and each rider shown separately;

  d.  Total guaranteed cash surrender values at the end of the year with values shown separately for the basic policy and each rider;

  e.  Cash dividends payable at the end of the year with values shown separately for the basic policy and each rider (Dividends need not be displayed beyond the twentieth policy year.);

  f.  Guaranteed endowment amounts payable under the policy which are not included under guaranteed cash surrender values above;

  (f)  The effective policy loan annual percentage interest rate, if the policy contains this provision, specifying whether this rate is applied in advance or in arrears.  If the policy loan interest rate is variable, the policy summary includes the maximum annual percentage rate;

  (g)  Life insurance cost indexes for ten and twenty years but in no case beyond the premium paying period.  Separate indexes are displayed for the basic policy and for each optional term life insurance rider.  Such indexes need not be included for optional riders which are limited to benefits such as accidental death benefits, disability waiver of premium, preliminary term life insurance coverage of less than twelve months and guaranteed insurability benefits nor for basic policies or optional riders covering more than one life;

  (h)  The equivalent level annual dividend, in the case of participating policies and participating optional term life insurance riders, under the same circumstances and for the same durations at which life insurance cost indexes are displayed;

  (i)  A policy summary which includes dividends shall also include a statement that dividends are based on the company's current dividend scale and are not guaranteed, in addition to a statement in close proximity to the equivalent level annual dividend as follows:  An explanation of the intended use of the equivalent level annual dividend is included in the life insurance buyer's guide;

  (j)  A statement in close proximity to the life insurance cost indexes as follows:  An explanation of the intended use of these indexes is provided in the life insurance buyer's guide;

  (k)  The date on which the policy summary is prepared.  The policy summary must consist of a separate document.  All information required to be disclosed must be set out in such a manner as to not minimize or render any portion thereof obscure.  Any amounts which remain level for two or more years of the policy may be represented by a single number if it is clearly indicated what amounts are applicable for each policy year.  Amounts in item (e) of this section shall be listed in total, not on a per thousand nor per unit basis.  If more than one insured is covered under one policy or rider, guaranteed death benefits shall be displayed separately for each insured or for each class of insureds if death benefits do not differ within the class.  Zero amounts shall be displayed as zero and shall not be displayed as a blank space.