Method and system for an enhanced step-up provision in a deferred variable annuity with a rising guaranteed step-up

• US 20090030823A1
• Filed: 11/09/2007
• Published: 01/29/2009
• Est. Priority Date: 07/24/2007
• Status: Active Grant

• Current Assignee: Hartford Fire Insurance Company (The Hartford Financial Services Group, Inc.)
• Original Assignee: Hartford Fire Insurance Company (The Hartford Financial Services Group, Inc.)
• Inventors: Wiland, David P., Tatro, Charles D.
• Granted Patent: US 7,848,989 B2
• Time in Patent Office: Days
• US Class Current: 705/35
• CPC Class Codes: G06Q 20/24 Credit schemes, i.e. "pay after"
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes
• CPC Class Codes: G06Q 40/03 Credit; Loans; Processing thereof
• CPC Class Codes: G06Q 40/04 Trading; Exchange, e.g. stocks, commodities, derivatives or currency exchange
• CPC Class Codes: G06Q 40/06 Asset management; Financial planning or analysis
• CPC Class Codes: G06Q 40/08 Insurance

Abstract

A computer implemented data processing system and method administers a deferred variable annuity contract during the accumulation phase for a relevant life. The annuity contract has a payment base value, a contract value, and a step-up provision. Administration of the product determines whether a step-up of the payment base value is applicable. If applicable, the product determines a step-up, wherein the step-up is guaranteed at a predetermined percentage. The investments of the deferred variable annuity contract are not limited to a specific asset allocation in order to qualify for the step-up provision.

Claims

1. A data processing system for administering a deferred variable annuity contract during the accumulation phase, the annuity contract having a payment base value, a contract value, and a step-up provision, said system comprising:

a storage device;

a processor coupled to the storage device, the storage device storing modules utilized by the processor, for determining if a step-up in the present payment base value is applicable and for determining a present payment base value and a contract base value for said annuity contract;

wherein the step-up is applicable if the present contract value is greater than the previous period'"'"'s payment base value; and

if the step-up is applicable, determining a step-up, wherein the step-up is guaranteed at a predetermined percentage, and if said step-up is greater than zero, for increasing the present payment base value by the step-up.

2. The data processing system of claim 1, wherein the step of determining if a step-up in the present payment base value is applicable is calculated on a predetermined interval.

3. The data processing system of claim 1, wherein said annuity contract does not restrict investments to a specific asset allocation in order to qualify for said step-up.

4. The data processing system of claim 1, wherein said step-up is calculated according to the following formula:

((the present contract value/the previous period'"'"'s payment base value)−

1).

5. The data processing system of claim 1, wherein the step of determining if a step-up in the present payment base value is applicable is calculated once a year.

6. The data processing system of claim 1, wherein the predetermined amount is equal to the previously highest attained contract value (minus the rider fee) as calculated at periodic time intervals.

7. A system for administering a deferred variable annuity contract during the accumulation phase, the annuity contract having a payment base value, a contract value, and a step-up provision, comprising:

a storage device;

a processor coupled to the storage device, the storage device storing modules utilized by the processor, the modules comprising;

i. a first module for receiving information from a relevant life in order to establish a deferred variable annuity contract;

ii. a second module for receiving lifetime benefit payment withdrawal requests from the relevant life; and

iii. a third module for determining if a step-up in the present payment base value is applicable, wherein the step-up is applicable if the present contract value is greater than the previous period'"'"'s payment base, and if the step-up is applicable;

1. for determining a step-up, wherein the step-up is guaranteed to a predetermined amount; and

2. if said step-up is greater than zero, an instruction for increasing the present payment base value according to the following formula;

((present payment base value)×

(1+step-up)).

8. The system of claim 7, wherein said annuity contract does not restrict investments to a specific asset allocation in order to qualify for the step-up provision.

9. The system of claim 7, wherein the lifetime benefit payment is equal to the payment base value multiplied by the withdrawal percent

10. The system of claim 7, wherein the lifetime benefit payment is calculated by the following formula:

the lifetime benefit payment (LBP)=the greater of;

i. payment base value×

withdrawal percent; and

ii. contract value×

withdrawal percent.

11. A computer implemented data processing method for administering a deferred variable annuity contract during the accumulation phase, the annuity contract having a payment base value, a contract value, and a step-up provision, said method comprising the steps of:

a. determining a present payment base value for an annuity contract;

b. determining a present contract value for said annuity contract;

c. determining if a step-up is applicable, wherein the step-up is applicable if the present contract value is greater than the previous period'"'"'s payment base; and

d. if the step-up is applicable,

i. determining a step-up amount, wherein the step-up amount is guaranteed at a minimum predetermined percentage;

ii. if said step-up amount is greater than zero, increasing the present payment base value by said amount.

12. The computer implemented data processing method of by claim 11, wherein said predetermined percentage is 100%.

13. The computer implemented data processing method of claim 11, wherein said annuity contract does not restrict investments to a specific asset allocation in order to qualify for said step-up.

14. The computer implemented data processing method of claim 11, wherein the present payment base value is calculated periodically.

15. The computer implemented data processing method of claim 11, wherein the present contract value is calculated periodically.

16. The computer implemented data processing method of claim 11, wherein said step of determining if said step-up is applicable is performed periodically.

17. The computer implemented data processing method of claim 11, wherein the present payment base value is calculated at each year'"'"'s contract anniversary date.

18. The computer implemented data processing method of claim 11, wherein the present contract value is calculated at each year'"'"'s contract anniversary date.

19. The computer implemented data processing method of claim 11, wherein the step of determining if a step-up in the present payment base value is applicable is calculated at each year'"'"'s contract anniversary date.

20. The computer implemented data processing method of claim 12, wherein said step-up is calculated according to the following formula:

((the present contract value)/(the previously calculated contract value)−

1).

21. The computer implemented data processing method of claim 11, wherein said payment base value is related to premium payments and withdrawals that are in excess of lifetime benefit payments.

22. The computer implemented data processing of claim 11, wherein said predetermined percentage is in the range of 0% to 10%.

23. The computer implemented data processing method of claim 11, wherein said predetermined percentage is less than 100%.

24. The computer implemented data processing method of claim 11, wherein said predetermined percentage is in the range of 0% to 50%.

25. The computer implemented data processing method of claimn 1, further comprising the step of:

periodically calculating a death benefit.