Method and system for a deferred variable annuity with lifetime benefit payments governed by an age-based withdrawal percent

• US 20090030850A1
• Filed: 11/09/2007
• Published: 01/29/2009
• Est. Priority Date: 07/24/2007
• Status: Active Grant

• Current Assignee: Talcott Resolution Life Insurance Co. (DSG)
• Original Assignee: Hartford Fire Insurance Company (The Hartford Financial Services Group, Inc.)
• Inventors: Weiss, Joseph M., Tatro, Charles D.
• Granted Patent: US 8,015,092 B2
• Time in Patent Office: Days
• US Class Current: 705/36.R
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes
• CPC Class Codes: G06Q 40/02 Banking, e.g. interest calculation or account maintenance credit or loans G06Q40/03
• 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 a present payment base, for determining a present contract value, for determining a withdrawal percent, and for calculating a lifetime benefit payment; and

wherein the lifetime benefit payment is related to the withdrawal percent and wherein the withdrawal percent automatically increases over the term of the annuity contract.

2. The data processing system of claim 1, wherein the lifetime benefit payment withdrawal is calculated by the following formula:

((the Present Payment Base)×

(the Withdrawal Percent)).

3. The data processing system of claim 1, wherein the lifetime benefit payment withdrawal is calculated by the following formula:

((the Present Contract Value)×

(the Withdrawal Percent)).

4. The data processing system of claim 1, wherein the maximum benefit payment withdrawal is (Withdrawal Percent)×

Greater of ((Present Payment Base×

Withdrawal Percent) or (Present Contract Value×

Withdrawal Percent)).

5. 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 determining a withdrawal percent;

iii. a third module for receiving lifetime benefit payment withdrawal requests from the relevant life;

iv. a fourth module for calculating a lifetime benefit payment;

wherein the lifetime benefit payment is related to the withdrawal percent and wherein the withdrawal percent automatically increases over the term of the annuity contract.

6. A deferred variable annuity contract comprising:

a. means for determining a present payment base;

b. means for determining a present contract value;

c. means for determining a withdrawal percent;

d. means for calculating a lifetime benefit payment;

wherein the lifetime benefit payment is related to the withdrawal percent and wherein the withdrawal percent automatically increases over the term of the annuity contract.

7. In a system for administering a deferred variable annuity contract during the accumulation phase, the improvement comprising:

administration means operative to calculate a lifetime benefit payment, wherein the lifetime benefit payment is related to a withdrawal percent and wherein the withdrawal percent automatically increases over the term of the annuity contract.

8. 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 a withdrawal percent;

d. if requested by the relevant life, calculating a lifetime benefit payment withdrawal for the relevant life which decreases the contract value;

wherein the lifetime benefit payment is related to the withdrawal percent and wherein the withdrawal percent automatically increases over the term of the annuity contract.

9. The computer implemented data processing method of by claim 8, wherein the lifetime benefit payment withdrawal is calculated by the following formula:

(the Present Payment Base)×

(the Withdrawal Percent).

10. The computer implemented data processing method of claim 8, wherein the lifetime benefit payment withdrawal is calculated by the following formula:

((the Present Contract Value)×

(the Withdrawal Percent)).

11. The computer implemented data processing method of claim 8, wherein the maximum benefit payment withdrawal is (Withdrawal Percent)×

Greater of ((Present Payment Base×

Withdrawal Percent) or (Present Contract Value×

Withdrawal Percent)).

12. The computer implemented data processing method of claim 8, wherein the lifetime benefit payment is calculated periodically.

13. The computer implemented data processing method of claim 8, wherein the lifetime benefit payment is calculated yearly.

14. The computer implemented data processing method of claim 8, wherein the lifetime benefit payment is not available until a relevant life is 60 years old.

15. The computer implemented data processing method of claim 8, wherein the Withdrawal Percent is:

a. 5.0% for lifetime benefit payment withdrawals taken between ages 60 and 64,

b. 5.5% for lifetime benefit payment withdrawals taken between ages 65 and 69,

c. 6.0% for lifetime benefit payment withdrawals taken between ages 70 and 74,

d. 6.5% for lifetime benefit payment withdrawals taken between ages 75 and 79, and

e. 7.0% for lifetime benefit payment withdrawals taken on or after age 80.

16. The computer implemented data processing method of claim 8, wherein if a lifetime benefit payment withdrawal is taken within the first 5 years of the contract, then the withdrawal percent will not automatically increase with the term of the annuity contract and will remain equal to the withdrawal percent established at the time of the first lifetime benefit payment withdrawal.

17. The computer implemented data processing method of claim 8, wherein the amount of the lifetime benefit payment withdrawal that is requested by the relevant life is less than the maximum available amount for that period.

18. The computer implemented data processing method of claim 8, further comprising the step of:

collecting a rider fee.

19. The computer implemented data processing method of claim 8, further comprising the step of:

collecting an account maintenance fee.

20. The computer implemented data processing method of claim 8, further comprising the step of:

determining a benefit amount for said annuity contract that is equal to the premium payments minus any lifetime benefit payments or withdrawals.

21. The computer implemented data processing method of claim 20, wherein if a withdrawal payment—

that is in excess of the lifetime benefit payment—

is requested, then the present payment base is reset to equal the present benefit amount.

22. The computer implemented data processing method of claim 20, further comprising the step of:

calculating a death benefit for a beneficiary upon the death of a relevant life, wherein the death benefit is equal to the present benefit amount.

23. The computer implemented data processing method of claim 20, further comprising the step of:

calculating a death benefit for a beneficiary upon the death of a relevant life, wherein the death benefit is the greater of;

(a) the present benefit amount; and

(b) the present contract value.

24. The computer implemented data processing method of claim 8, further comprising the step of:

calculating a death benefit for a beneficiary upon the death of a relevant life, wherein the death benefit is the greater of;

(a) a predetermined guaranteed death benefit amount; and

(b) the present contract value.

25. The computer implemented data processing method of claim 8, wherein the value of the annuity payments equals the value of the most recent lifetime benefit payment.