David C. Roark and Estate of Irene Roark, Deceased, David C. Roark, Executor - Page 7

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          amount value.”4  The $489,000 death benefit, plus the unearned              
          premium account value, would be paid to the Roark Foundation,               
          with 75 percent ultimately going to the Gideons, but NCF would be           
          able to use the remaining 25 percent for its own programs.  The             
          Roark Trust would receive at least the remaining $1.711 million             
          of the death benefit.5                                                      
               3.  If NCF made some of the payments but then stopped.                 
          Under this option, NCF’s portion of the death benefit would be              
          fixed at $489,000 until the accrued premiums earned were equal to           
          NCF’s payments.  NCF’s interest in the policy would then end, but           
          if the Trust and NCF agreed to terminate the policy while some of           
          the premiums remained unearned, NCF would at least get those                
          premiums back.                                                              
               Pippenger was also involved in the arrangement.  Whenever              
          Mr. Roark sent in money to NCF, Pippenger would fill out and send           


               4 As is common with insurance companies, IDS Life earns its            
          premiums by accepting risk for a given time.  It thus “earns”               
          accelerated premiums only over that time.  The “unearned premium            
          account value” was the excess of the premiums NCF had paid over             
          the amount IDS Life had earned.                                             
               5 The Roark Trust would actually receive the larger of the             
          death benefit or a percentage of the “policy value.”  In the                
          early years of the policy, the death benefit would almost                   
          certainly be larger than the policy value.  However, as with most           
          universal life policies, the longer the Roarks’ policy was in               
          effect, the more likely it would be that the accounts into which            
          the accelerated premiums were invested would grow in value and              
          eventually exceed the death benefit.  Under the Plan Agreement,             
          this buildup in value would accrue entirely to the Trust’s                  
          benefit, not NCF’s.                                                         





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