Neonatology Associates, P.A., et al - Page 26




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            transferred at this time to the C-group conversion UL policy,                              
            upon conversion thereto, because the C-group term policy was in                            
            its first year.  This policy lapsed on March 15, 1992.                                     
                  2.  Dr. Mall’s Commonwealth C-Group Term Policy                                      
                  Effective March 15, 1992, Commonwealth issued a $650,000 C-                          
            group term policy (certificate No. 6007725) on the life of Dr.                             
            Mall, age 46.  The first-year premium was $10,653.50, and the                              
            cost of insuring Dr. Mall for that year was $1,764.60.  The                                
            Neonatology Plan paid the first-year premium, and, at the end of                           
            that year, the conversion credit balance was $9,288.90                                     
            ($10,653.50 - $1,764.60 + $400); the $400 is the interest of 4.5                           
            percent earned on the conversion credit balance (($9,288.90 -                              
            $400) x 4.5% = $400)).  None of the conversion credit balance                              
            could have been transferred at this time to the C-group                                    
            conversion UL policy, upon conversion thereto, because the C-                              
            group term policy was in its first year.                                                   
                  The second-year premium, before any experience refund, was                           
            $10,731.50.  The policy was credited with an experience refund of                          
            $106.08, and the Neonatology Plan paid the net premium of                                  
            $10,625.42 ($10,731.50 - $106.08).  The cost of insuring Dr. Mall                          
            for the second year was $1,814.34, and, at the end of that year,                           
            the conversion credit balance was $19,025.33 ($9,288.90 +                                  
            $10,731.50 - $1,814.34 + $819.27); the $819.27 is the interest of                          
            4.5 percent earned on the conversion credit balance (($19,025.33                           






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