TERM CONVERSIONS. On a term conversion in the first policy year, the term writer's first-year commissions are protected. The writer of the permanent policy will receive first-year commissions on the new policy less the FYC paid on the term policy, and will receive full renewal commissions. A term policy in its second or later policy year may be converted, and full commissions will be credited to the writer effecting the term conversion.
TERM CONVERSIONS. If a Term plan is exchanged for a universal life or whole life policy within the first ten years, full first year commissions will be paid on the premium actually paid by the policy owner up to the target premium reduced by the conversion allowance, if any. If the exchange occurs more than ten years after issue, all premiums for the new policy will be commissioned at the renewal rate.
TERM CONVERSIONS. For purposes of this Agreement, a term conversion is a contractual right of the insured to replace a term policy with a permanent plan without evidence of insurability. The Reinsurer will continue to reinsure policies resulting from a term conversion of any policy reinsured under this Agreement, in an amount not to exceed the original amount reinsured hereunder. If the policy converts to a plan reinsured with the Reinsurer under either this Agreement or another Agreement, the reinsurance rates for the converted policy will be the reinsurance rates contained in the Agreement that covers the plan to which the original policy is converting. If the policy converts to a plan not reinsured with the Reinsurer, the reinsurance will continue under this Agreement on a yearly renewable term basis using the YRT conversion rates set forth in Section 4 of Schedule B. Reinsurance rates for term conversions will be point in scale (based on the original issue age, duration, and original underwriting class since issuance of the original policy). The recapture period applicable to the original policy will govern the converted policy and duration will be measured from the effective date of the original policy. Reinsurer will not reimburse Ceding Company for any conversion credits Ceding Company supplies to the insured. If the term conversion results in an increase in risk amount, the increase will be underwritten by the Ceding Company as new business and will be eligible for reinsurance coverage under this Agreement as new business. When a conversion is fully underwritten, the resulting policy will be administered the same as the issuance of a new policy.
TERM CONVERSIONS. On a term conversion in the first policy year, the term writer's first-year commissions are protected. The writer of the permanent policy will receive first-year commissions on the new policy less the FYC paid on the term policy, and will receive full renewal commissions. A term policy in its second or later policy year may be converted, and full commissions will be credited to the writer effecting the term conversion. Enterprise Selling Agreement GAD Version - September 2003 Page 48 of 59 EXAMPLES -------- It's important to note at this point that the examples below show the net FYC you would receive given the assumptions shown. Remember, AS CURRENTLY IS THE BUSINESS PROCESS, Full FYC may well be paid out in one pay cycle AND the relative Rewritten Business Rule adjustments, may come 1 or more pay cycles later.
TERM CONVERSIONS. When a full or partial term conversion is made and the in-force term coverage is converted to whole life insurance, PC is granted and commissions are paid on the full amount of the new (converted) policy's premium. However, if ANY of the in-force term coverage is canceled, NO PC or commissions will be paid on the converted policy. Also, a conversion made during the first policy year is treated as follows:
TERM CONVERSIONS. The Reinsurer will only support conversions from the 20-year Term Rider as shown in Exhibit 1 - Reinsurance Specifications, on the rates per Exhibit 5 - Reinsurance Premium Methodology And Rates. The amount to be reinsured will be determined on the same basis as used for the original rider (e.g. excess of retention, quota share) but will not exceed the amount reinsured immediately prior to the conversion date.
TERM CONVERSIONS. The Ceding Company shall retain all conversions.
TERM CONVERSIONS. The first year commission at conversion shall be reduced by the first year commission paid on the term insurance if conversion occurs (1) within 120 days of issue of the term insurance and the new policy has a Policy Date at the insured's attained age, or (2) before the end of the second policy year of the term insurance and the new policy has a Policy Date at the insured's age at issue of the term insurance. If a term rider is continued after conversion, or if part of the term policy is continued as a term rider on the new policy, only a 5% commission on the rider premium will be paid in the first year after conversion; thereafter, compensation will be paid at the rate for the basic policy. For compensation purposes, Policy Years for policies issued as term conversions shall be measured from the date of conversion. All compensation after conversion is payable to the Agent credited with the conversion.
TERM CONVERSIONS. If the policy is on a term plan reinsured under this reinsurance agreement with the Reinsurer and is converted, then the reinsurance shall continue on the YRT reinsurance rates as per Exhibit 8, Reinsurance Rates. The reinsurance premium and any allowance and any extra or benefit reinsurance premiums and allowances under Section 13, Reinsurance Premiums, shall be on a point-in-scale basis from the original issue age and on the duration in completed years of the term policy at the date of conversion. The amount to be reinsured will be determined on the same basis as used for the original policy (e.g. excess of retention, quota share) but will not exceed the amount reinsured as of the date of conversion unless mutually agreed otherwise. The Reinsurer does not support conversions to permanent plans under this Agreement where it is not the original reinsurer.
TERM CONVERSIONS. Any term policy of Life Insurance Company of the Southwest or the Ceding Company (even if not reinsured by the Reinsurer) converting to a policy covered under this Agreement will be subject to all the terms and conditions herein. Reinsurance premiums for the new policy will be on a point-in-scale basis.
