Financial instrument providing a guaranteed growth rate and a guarantee of lifetime payments

• US 20070100715A1
• Filed: 04/14/2006
• Published: 05/03/2007
• Est. Priority Date: 07/29/2005
• Status: Active Grant

• Current Assignee: Prudential Insurance Company of America (Prudential Financial Incorporated)
• Original Assignee: Prudential Insurance Company of America (Prudential Financial Incorporated)
• Inventors: Herschler, Jacob, O'Donnell, Robert, Schwartz, Robert, Rae, Polly, Fishbein, Robert, Putterman, Steven, Jackman-Ward, Fiona, Phifer, Gary, Kane, Daniel, Runestad, Dain, Buzzelli, Marc, Shecklev, Christopher, Kuperstock, N.
• Granted Patent: US 7,831,496 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
• CPC Class Codes: G06Q 40/06 Asset management; Financial planning or analysis

Abstract

A method for providing a financial instrument includes determining an initial account balance associated with a financial instrument based upon an initial deposit amount, wherein the financial instrument includes an account with an account balance that changes over time. The method further includes establishing a first guarantee of a protected value, the protected value including at least an amount based upon the initial account balance growing at a minimum growth rate for a defined period of time or until one or more defined events occur, whichever is sooner; and establishing a second guarantee that a beneficiary may periodically receive a transfer of an amount of money for the life of a designated party, wherein the amount comprises a percentage of the protected value at the time of a particular event, provided that the amount may vary based upon withdrawals from the account in excess of a first particular limit.

Claims

1. A financial instrument management system, comprising:

software stored on a computer-readable medium and operable to calculate a fee for a financial instrument, the financial instrument comprising;

an account with an account balance that changes over time, wherein at least part of the account balance may be discretionarily withdrawn and wherein the initial account balance is based upon an initial deposit amount;

a first guarantee of a protected value, the protected value comprising at least an amount based upon the initial account balance growing at a minimum positive growth rate for at least a defined period of time or until one or more defined events occur, whichever is sooner; and

a second guarantee that a beneficiary may periodically receive a transfer of an amount of money for the life of a designated party, wherein the amount comprises a percentage of the protected value at the time of a particular event, wherein the percentage of the protected value is fixed upon an effective date of the second guarantee, and wherein the transfer may be due to withdrawal from the account or due to benefit payments made to the beneficiary, provided that the amount may vary based upon withdrawals from the account in excess of a first particular limit.

2. The system of claim 1, wherein the beneficiary comprises the designated party.

3. The system of claim 1, wherein the initial account balance is equal to the initial deposit amount.

4. The system of claim 1, wherein the minimum positive growth rate is a fixed rate between four percent and six percent.

5. The system of claim 1, wherein the minimum positive growth rate is a variable rate.

6. The system of claim 5, wherein the minimum positive growth rate is based on a consumer price index.

7. The system of claim 1, wherein the protected value further comprises at least any positive value calculated by subtracting the amount based upon the initial account balance growing at a minimum positive growth rate from the account balance, at the end of the period of time or at the time of the one or more defined events.

8. The system of claim 1, wherein the initial deposit is based on an account balance from an existing contract.

9. The system of claim 1, wherein the percentage of the protected value is independent of the designated party'"'"'s age.

10. The system of claim 1, wherein the percentage of the protected value is independent of the designated party'"'"'s age and gender.

11. A method for providing a financial instrument, the method comprising:

determining an initial account balance associated with a financial instrument based upon an initial deposit amount, wherein the financial instrument comprises an account with an account balance that changes over time and allows at least part of the account balance to be discretionarily withdrawn;

establishing a first guarantee of a protected value, the protected value comprising at least an amount based upon the initial account balance growing at a minimum positive growth rate for at least a defined period of time or until one or more defined events occur, whichever is sooner;

establishing a second guarantee that a beneficiary may periodically receive a transfer of an amount of money for the life of a designated party, wherein the amount comprises a percentage of the protected value at the time of a particular event, wherein the percentage of the protected value is fixed upon an effective date of the second guarantee, and wherein the transfer may be due to withdrawal from the account or due to benefit payments made to the beneficiary, provided that the amount may vary based upon withdrawals from the account in excess of a first particular limit; and

wherein at least one of the above actions is performed using a computer.

12. The method of claim 11, wherein the beneficiary comprises the designated party.

13. The method of claim 11, wherein the initial account balance is equal to the initial deposit amount.

14. The method of claim 11, wherein the minimum positive growth rate is a fixed rate between four percent and six percent.

15. The method of claim 11, wherein the minimum positive growth rate is a variable rate.

16. The method of claim 15, wherein the minimum positive growth rate is based on a consumer price index.

17. The method of claim 11, wherein the protected value further comprises at least any positive value calculated by subtracting the amount based upon the initial account balance growing at a minimum positive growth rate from the account balance, at the end of the period of time or at the time of the one or more defined events.

18. The method of claim 11, wherein the initial deposit is based on an account balance from an existing contract.

19. The method of claim 11, wherein the percentage of the protected value is independent of the designated party'"'"'s age.

20. The method of claim 11, wherein the percentage of the protected value is independent of the designated party'"'"'s age and gender.

21. A method for providing a financial instrument, the method comprising:

determining an initial account balance associated with a financial instrument based upon an initial deposit amount, wherein the financial instrument comprises an account with an account balance that changes over time and allows at least part of the account balance to be discretionarily withdrawn;

establishing a first guarantee of a protected value, the protected value comprising at least an amount based upon the initial account balance growing at a minimum positive growth rate for at least a defined period of time or until one or more defined events occur, whichever is sooner;

establishing a second guarantee that one or more beneficiaries may periodically receive a transfer of an amount of money for the life of the longest surviving of a plurality of designated parties, wherein the amount comprises a percentage of the protected value at the time of a particular event, wherein the percentage of the protected value is fixed upon an effective date of the second guarantee, and wherein the transfer may be due to withdrawal from the account or due to benefit payments made to the one or more beneficiaries, provided that the amount may vary based upon withdrawals from the account in excess of a first particular limit; and

wherein at least one of the above actions is performed using a computer.

22. The method of claim 21, wherein the one or more beneficiaries comprise one or more of the plurality of designated parties.

23. The method of claim 21, wherein the one or more beneficiaries comprise a married couple.

24. The method of claim 21, wherein the minimum positive growth rate is a variable rate.

25. The method of claim 24, wherein the minimum positive growth rate is based on a consumer price index.

26. The method of claim 21, wherein the protected value further comprises at least any positive value calculated by subtracting the amount based upon the initial account balance growing at a minimum positive growth rate from the account balance, at the end of the period of time or at the time of the one or more defined events.

27. The method of claim 21, wherein the initial deposit is based on an account balance from an existing contract.

28. The method of claim 21, wherein the percentage of the protected value is independent of the designated parties'"'"' ages.

29. The method of claim 21, wherein the percentage of the protected value is independent of the designated parties'"'"' ages and genders.

30. A method for providing a financial instrument, the method comprising:

determining an initial account balance associated with a financial instrument based upon an initial deposit amount, wherein the financial instrument comprises an account with an account balance that changes over time and allows at least part of the account balance to be discretionarily withdrawn;

establishing a first guarantee of a protected value, the protected value comprising at least an amount based upon the initial account balance growing at a minimum positive growth rate for a duration, the duration beginning at a first time and extending at least until a second time, wherein the second time is determined by the expiration of a specified period of time after the first time or by the occurrence of one or more defined events occur, whichever is sooner;

establishing a second guarantee that a beneficiary may periodically receive a transfer of an amount of money for the life of a designated party, wherein the amount comprises a percentage of the protected value at the time of a particular event, wherein the percentage of the protected value is fixed upon an effective date of the second guarantee, and wherein the transfer may be due to withdrawal from the account or due to benefit payments made to the beneficiary, provided that the amount may vary based upon withdrawals from the account in excess of a first particular limit; and

wherein at least one of the above actions is performed using a computer.

31. The method of claim 30, wherein the first time is substantially equivalent to the time at which the initial account balance is determined.

32. The method of claim 30, wherein the first time is substantially equivalent to five years after the time at which the initial account balance is determined.

33. The method of claim 30, wherein the second time is substantially equivalent to the time at which a first discretionary withdrawal is made from the account balance.

34. The method of claim 30, wherein the minimum positive growth rate is a variable rate.

35. The method of claim 34, wherein the minimum positive growth rate is based on a consumer price index.

36. The method of claim 30, wherein the protected value further comprises at least any positive value calculated by subtracting the amount based upon the initial account balance growing at a minimum positive growth rate from the account balance, at the second time.

37. The method of claim 30, wherein the initial deposit is based on an account balance from an existing contract.

38. The method of claim 30, wherein the percentage of the protected value is independent the designated party'"'"'s age.

39. The method of claim 30, wherein the percentage of the protected value is independent of the designated party'"'"'s age and gender.

40. A computer system for providing a financial instrument, the computer system operable to:

receive a request to purchase a financial instrument, the financial instrument comprising;

an account with an account balance that changes over time, wherein at least part of the account balance may be discretionarily withdrawn and wherein the initial account balance is based upon an initial deposit amount;

a first guarantee of a protected value, the protected value comprising at least an amount based upon the initial account balance growing at a minimum positive growth rate for at least a defined period of time or until one or more defined events occur, whichever is sooner; and

a second guarantee that a beneficiary may periodically receive a transfer of an amount of money for the life of a designated party, wherein the amount comprises a percentage of the protected value at the time of a particular event, wherein the percentage of the protected value is fixed upon an effective date of the second guarantee, and wherein the transfer may be due to withdrawal from the account or due to benefit payments made to the beneficiary, provided that the amount may vary based upon withdrawals from the account in excess of a first particular limit;

process the request to purchase the financial instrument; and

transmit an account identifier associated with the financial instrument.

41. The computer system of claim 40, wherein the initial account balance is equal to the initial deposit amount.

42. The computer system of claim 40, wherein the minimum positive growth rate is a variable rate.

43. The computer system of claim 42, wherein the minimum positive growth rate is based on a consumer price index.

44. The computer system of claim 40, wherein the protected value further comprises at least any positive value calculated by subtracting the amount based upon the initial account balance growing at a minimum positive growth rate from the account balance, at the end of the period of time or at the time of the one or more defined events.

45. The computer system of claim 40, wherein the initial deposit is based on an account balance from an existing contract.

46. The computer system of claim 40, wherein the percentage of the protected value is independent of the designated party'"'"'s age.

47. The computer system of claim 40, wherein the percentage of the protected value is independent of the designated party'"'"'s age and gender.

48. A financial instrument comprising:

an account with an account balance that changes over time, wherein at least part of the account balance may be discretionarily withdrawn and wherein the initial account balance is based upon an initial deposit amount;

a first guarantee of a protected value, the protected value comprising at least an amount based upon the initial account balance growing at a minimum positive growth rate for at least a defined period of time or until one or more defined events occur, whichever is sooner; and

a second guarantee that a beneficiary may periodically receive a transfer of an amount of money for the life of a designated party, wherein the amount comprises a percentage of the protected value at the time of a particular event, wherein the percentage of the protected value is fixed upon an effective date of the second guarantee, and wherein the transfer may be due to withdrawal from the account or due to benefit payments made to the beneficiary, provided that the amount may vary based upon withdrawals from the account in excess of a first particular limit.

49. The financial instrument of claim 48, wherein the beneficiary comprises the designated party.

50. The financial instrument of claim 48, wherein the minimum positive growth rate is a variable rate.

51. The financial instrument of claim 50, wherein the minimum positive growth rate is based on a consumer price index.

52. The financial instrument of claim 48, wherein the protected value further comprises at least any positive value calculated by subtracting the amount based upon the initial account balance growing at a minimum positive growth rate from the account balance, at the end of the period of time or at the time of the one or more defined events.

53. The financial instrument of claim 48, wherein the initial deposit is based on an account balance from an existing contract.

54. The financial instrument of claim 48, wherein the percentage of the protected value is independent of the designated party'"'"'s age.

55. The financial instrument of claim 48, wherein the percentage of the protected value is independent of the designated party'"'"'s age and gender.

56. A financial instrument associated with an account having an account balance that changes over time, wherein at least part of the account balance may be discretionarily withdrawn and wherein the initial account balance is based upon an initial deposit amount, the financial instrument comprising:

a first guarantee of a protected value, the protected value comprising at least an amount based upon the initial account balance growing at a minimum positive growth rate for at least a defined period of time or until one or more defined events occur, whichever is sooner; and

a second guarantee that a beneficiary may periodically receive a transfer of an amount of money for the life of a designated party, wherein the amount comprises a percentage of the protected value at the time of a particular event, wherein the percentage of the protected value is fixed upon an effective date of the second guarantee, and wherein the transfer may be due to withdrawal from the account or due to benefit payments made to the beneficiary, provided that the amount may vary based upon withdrawals from the account in excess of a first particular limit.

57. The financial instrument of claim 56, wherein the minimum positive growth rate is a variable rate.

58. The financial instrument of claim 57, wherein the minimum positive growth rate is based on a consumer price index.

59. The financial instrument of claim 56, wherein the protected value further comprises at least any positive value calculated by subtracting the amount based upon the initial account balance growing at a minimum positive growth rate from the account balance, at the end of the period of time or at the time of the one or more defined events.

60. The financial instrument of claim 56, wherein the initial deposit is based on an account balance from an existing contract.

61. The financial instrument of claim 56, wherein the percentage of the protected value is independent of the designated party'"'"'s age.

62. The financial instrument of claim 56, wherein the percentage of the protected value is independent of the designated party'"'"'s age and gender.

63. A financial instrument associated with an account having an account balance that changes over time, wherein at least part of the account balance may be discretionarily withdrawn and wherein the initial account balance is based upon an initial deposit amount, the financial instrument comprising:

a first guarantee of a protected value, the protected value comprising at least an amount based upon the initial account balance growing at a minimum positive growth rate for at least a defined period of time or until one or more defined events occur, whichever is sooner; and

a second guarantee that one or more beneficiaries may periodically receive a transfer of an amount of money for the life of the longest surviving of a plurality of designated parties, wherein the amount comprises a percentage of the protected value at the time of a particular event, wherein the percentage of the protected value is fixed upon an effective date of the second guarantee, and wherein the transfer may be due to withdrawal from the account or due to benefit payments made to the one or more beneficiaries, provided that the amount may vary based upon withdrawals from the account in excess of a first particular limit.

64. The financial instrument of claim 63, wherein the minimum positive growth rate is a variable rate.

65. The financial instrument of claim 64, wherein the minimum positive growth rate is based on a consumer price index.

66. The financial instrument of claim 63, wherein the protected value further comprises at least any positive value calculated by subtracting the amount based upon the initial account balance growing at a minimum positive growth rate from the account balance, at the end of the period of time or at the time of the one or more defined events.

67. The financial instrument of claim 63, wherein the initial deposit is based on an account balance from an existing contract.

68. The financial instrument of claim 63, wherein the percentage of the protected value is independent of the designated parties'"'"' ages.

69. The financial instrument of claim 63, wherein the percentage of the protected value is independent of the designated parties'"'"' ages and genders.