Method for providing retirement income using mutual fund longevity insurance

• US 20060106698A1
• Filed: 11/18/2004
• Published: 05/18/2006
• Est. Priority Date: 11/18/2004
• Status: Active Grant

• Current Assignee: Prudential Insurance Company of America (Prudential Financial Incorporated)
• Original Assignee: Prudential Insurance Company of America (Prudential Financial Incorporated)
• Inventors: Mahaney, James I., Andreano, James
• Granted Patent: US 8,438,046 B2
• Time in Patent Office: Days
• US Class Current: 705/35
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes

Abstract

A method for providing retirement income using mutual fund longevity insurance is provided. A current or prospective retiree can purchase a mutual fund coupled with a longevity product. The longevity product insures against the early exhaustion or termination of the mutual fund, superannuation, or poor market performance of the mutual fund, and could be funded using a qualified annuity, a Roth Individual Retirement Annuity (IRA), or a non-qualified annuity to provide tax advantages. Retirement income is provided for the retiree beginning at retirement. During the life of the mutual fund, periodic withdrawals are taken from the mutual fund and invested in the longevity product. If the retiree reaches a threshold age, the retiree can choose to receive income from the longevity product. Optionally, if the retiree reaches the threshold age and sufficient income is available from the mutual fund, the retiree can continue to receive income from the mutual fund and delay receiving income from the longevity product until a later age. Income from the longevity product can be provided until the death of the retiree. A number of insurance options can be provided, including a pure insurance option, a partial insurance option, or a guaranteed payback option.

Claims

1. A method for providing retirement income for an individual comprising:

purchasing a mutual fund coupled with a longevity product;

periodically investing a portion of the mutual fund in the longevity product;

receiving income from the mutual fund to provide retirement income when the individual retires; and

receiving income from the longevity product to provide retirement income when the individual reaches a threshold age and until death.

2. The method of claim 1, wherein the step of purchasing the mutual fund comprises purchasing a mutual fund with a management fee that is less than average mutual fund management fees.

3. The method of claim 2, wherein the step of periodically investing a portion of the mutual fund in the longevity product comprises investing the difference between the management fee and the average mutual fund management fees in the longevity product.

4. The method of claim 1, further comprising allowing the individual to contribute to the mutual fund.

5. The method of claim 1, wherein the step of purchasing the mutual fund coupled with the longevity product comprises purchasing a mutual fund coupled with a non-qualified annuity.

6. The method of claim 1, wherein the step of purchasing the mutual fund coupled with the longevity product comprises purchasing a mutual fund coupled with a Roth IRA.

7. The method of claim 1, wherein the step of purchasing the mutual fund coupled with the longevity product comprises purchasing a mutual fund coupled with a qualified annuity.

8. The method of claim 1, further comprising paying taxes on the portion of the mutual fund prior to periodically investing the portion of the mutual fund in the longevity product.

9. The method of claim 1, wherein the step of receiving income from the longevity product comprises receiving income from the longevity product to provide retirement income until death when the individual reaches the threshold age and the mutual fund is exhausted.

10. The method of claim 1, further comprising deferring income from the longevity product until the individual reaches an age greater than the threshold age prior to receiving income from the longevity product.

11. A method for providing retirement income for an individual comprising:

purchasing a mutual fund coupled with a longevity product;

periodically investing a portion of the mutual fund in the longevity product;

receiving income from the mutual fund to provide retirement income when the individual retires;

receiving income from the longevity product to provide retirement income when the individual reaches a threshold age and until death; and

returning a remaining balance of the longevity product to an entity issuing the longevity product at the death of the individual.

12. The method of claim 11, wherein the step of purchasing the mutual fund comprises purchasing a mutual fund with a management fee that is less than average mutual fund management fees.

13. The method of claim 12, wherein the step of periodically investing a portion of the mutual fund in the longevity product comprises investing the difference between the management fee and the average mutual fund management fees in the longevity product.

14. The method of claim 11, further comprising allowing the individual to contribute to the mutual fund.

15. The method of claim 11, wherein the step of purchasing the mutual fund coupled with the longevity product comprises purchasing a mutual fund coupled with a non-qualified annuity.

16. The method of claim 11, wherein the step of purchasing the mutual fund coupled with the longevity product comprises purchasing a mutual fund coupled with a Roth IRA.

17. The method of claim 11, wherein the step of purchasing the mutual fund coupled with the longevity product comprises purchasing a mutual fund coupled with a qualified annuity.

18. The method of claim 11, further comprising paying taxes on the portion of the mutual fund prior to periodically investing the portion of the mutual fund in the longevity product.

19. The method of claim 11, wherein the step of receiving income from the longevity product comprises receiving income from the longevity product to provide retirement income until death when the individual reaches the threshold age and the mutual fund is exhausted.

20. The method of claim 11, further comprising deferring income from the longevity product until the individual reaches an age greater than the threshold age prior to receiving income from the longevity product.

21. A method for providing retirement income for an individual comprising:

purchasing a mutual fund coupled with a longevity product;

periodically investing a portion of the mutual fund in the longevity product;

receiving income from the mutual fund to provide retirement income when the individual retires;

receiving income from the longevity product to provide retirement income when the individual reaches a threshold age and until death;

returning a remaining balance of the longevity product to heirs of the individual if the individual dies at an age less than the threshold age.

22. The method of claim 21, wherein the step of purchasing the mutual fund comprises purchasing a mutual fund with a management fee that is less than average mutual fund management fees.

23. The method of claim 22, wherein the step of periodically investing a portion of the mutual fund in the longevity product comprises investing the difference between the management fee and the average mutual fund management fees in the longevity product.

24. The method of claim 21, further comprising allowing the individual to contribute to the mutual fund.

25. The method of claim 21, wherein the step of purchasing the mutual fund coupled with the longevity product comprises purchasing a mutual fund coupled with a non-qualified annuity.

26. The method of claim 21, wherein the step of purchasing the mutual fund coupled with the longevity product comprises purchasing a mutual fund coupled with a Roth IRA.

27. The method of claim 21, wherein the step of purchasing the mutual fund coupled with the longevity product comprises purchasing a mutual fund coupled with a qualified annuity.

28. The method of claim 21, further comprising paying taxes on the portion of the mutual fund prior to periodically investing the portion of the mutual fund in the longevity product.

29. The method of claim 21, wherein the step of receiving income from the longevity product comprises receiving income from the longevity product to provide retirement income until death when the individual reaches the threshold age and the mutual fund is exhausted.

30. The method of claim 21, further comprising deferring income from the longevity product until the individual reaches an age greater than the threshold age prior to receiving income from the longevity product.

31. A method for providing retirement income for an individual comprising:

purchasing a mutual fund coupled with a longevity product;

periodically investing a portion of the mutual fund in the longevity product;

receiving income from the mutual fund to provide retirement income when the individual retires;

receiving income from the longevity product to provide retirement income when the individual reaches a threshold age and until death; and

returning a remaining balance of the longevity product to heirs of the individual at the death of the individual.

32. The method of claim 31, wherein the step of purchasing the mutual fund comprises purchasing a mutual fund with a management fee that is less than average mutual fund management fees.

33. The method of claim 32, wherein the step of periodically investing a portion of the mutual fund in the longevity product comprises investing the difference between the management fee and the average mutual fund management fees in the longevity product.

34. The method of claim 31, further comprising allowing the individual to contribute to the mutual fund.

35. The method of claim 31, wherein the step of purchasing the mutual fund coupled with the longevity product comprises purchasing a mutual fund coupled with a non-qualified annuity.

36. The method of claim 31, wherein the step of purchasing the mutual fund coupled with the longevity product comprises purchasing a mutual fund coupled with a Roth IRA.

37. The method of claim 31, wherein the step of purchasing the mutual fund coupled with the longevity product comprises purchasing a mutual fund coupled with a qualified annuity.

38. The method of claim 31, further comprising paying taxes on the portion of the mutual fund prior to periodically investing the portion of the mutual fund in the longevity product.

39. The method of claim 31, wherein the step of receiving income from the longevity product comprises receiving income from the longevity product to provide retirement income until death when the individual reaches the threshold age and the mutual fund is exhausted.

40. The method of claim 31, further comprising deferring income from the longevity product until the individual reaches an age greater than the threshold age prior to receiving income from the longevity product.

42. The method of claim 40, wherein the step of providing the mutual fund comprises providing a mutual fund with a management fee that is less than average mutual fund management fees.

44. The method of claim 40, further comprising distributing remaining funds in the longevity product in accordance with an insurance option.

45. The method of claim 44, wherein the step of distributing remaining funds comprises allowing an entity issuing the longevity product to retain the remaining funds.

46. The method of claim 44, wherein the step of distributing remaining funds comprises distributing remaining funds to heirs of the individual if the individual dies at an age less than the threshold age.

47. The method of claim 44, wherein the step of distributing remaining funds comprises distributing remaining funds to heirs of the individual at the death of the individual.

41. A method for providing retirement income for an individual comprising:

coupling a longevity product to a mutual fund;

periodically deducting a portion of the mutual fund for the longevity product;

disbursing funds from the mutual fund to provide retirement income when the individual retires; and

disbursing funds from the longevity product to provide retirement income when the individual reaches a threshold age and until death.

43. The method of claim 41, wherein the step of periodically deducting a portion of the mutual fund for the longevity product comprises investing the difference between the management fee and the average mutual fund management fees in the longevity product.