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insuring Dr. Desai for the third year was $4,449.23, and, at the
end of that year, the conversion credit balance was $46,879.92
($29,560.40 + $19,750 - $4,449.23 + $2,018.75); the $2,018.75 is
the interest of 4.5 percent earned on the conversion credit
balance (($46,879.92 - $2,018.75) x 4.5% = $2,018.75)). Of the
conversion credit balance, $42,309.13 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 third year
($46,879.92 x 90.25%).
The Lakewood Plan continued to pay the premiums on this
policy, net of the applicable experience refund, through 1996.
Effective October 1, 1996, Dr. Desai converted this policy to a
fully paid, individually owned C-group conversion UL policy in
the face amount of $151,656. At the time of conversion, the C-
group term policy’s conversion credit balance was $84,397.58, and
$80,177.70 of that amount ($84,397.58 x 95%) was transferred to
the C-group conversion UL policy for potential earning. Dr.
Desai will earn these credits in 120 equal monthly installments,
beginning October 1996. The conversion credit balance of
$80,177.70 equaled the amount referenced in Commonwealth’s table
of conversion credit values for the following variables: (1)
Business issued before February 1, 1993, (2) male, (3) issue age
46, (4) duration of 4 years 10 months, and (5) $1 million death
benefit.
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