Neonatology Associates, P.A., et al - Page 49




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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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