- 56 -
(($39,661.57 - $1,707.91) x 4.5% = $1,707.91)). 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
$50,440.40. The policy was credited with an experience refund of
$362.35, and Lakewood paid the net premium of $50,078.05
($50,440.40 - $362.35). The cost of insuring Dr. Hirshkowitz for
the second year was $11,830.58, and, at the end of that year, the
conversion credit balance was $81,793.61 ($39,661.58 + $50,440.40
- $11,830.58 + $3,522.21); the $3,522.21 is the interest of 4.5
percent earned on the conversion credit balance (($81,793.61 -
$3,522.21) x 4.5% = $3,522.21)). Of the conversion credit
balance, $38,851.96 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 second year
($81,793.61 x 47.5%).
Lakewood continued to pay the premiums on this policy, net
of the applicable experience refund, through 1995. Effective
October 15, 1995, Dr. Hirshkowitz converted this policy to a
fully paid, individually owned C-group conversion UL policy in
the face amount of $164,406. At the time of conversion, the C-
group term policy’s conversion credit balance was $129,411.70,
and $122,941.12 of that amount ($129,411.70 x 95%) was
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