Method and system for providing verifiable line of credit information

• US 5,025,138 A
• Filed: 01/06/1987
• Issued: 06/18/1991
• Est. Priority Date: 02/27/1984
• Status: Expired due to Fees

• Current Assignee: Vincent Cuervo
• Original Assignee: Vincent Cuervo
• Inventors: Cuervo, Vincent
• Primary Examiner(s): Fuller, Benjamin R.
• Assistant Examiner(s): Rogers, Scott A.
• Application Number:
  US07/141,150
• Time in Patent Office: 1,624 Days
• Field of Search: 235/379, 235/380, 235/381, 364/225.2, 364/227.3, 364/408
• US Class Current: 705/38
• CPC Class Codes: G06Q 20/403 Solvency checks
• 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 40/08 Insurance
• CPC Class Codes: G07F 17/0014 for vending, access and use of specific services not covered anywhere else in G07F17/00 meter-controlled dispensing of liquid, gas or electricity G07F15/00
• CPC Class Codes: G07F 7/08 by coded identity card or credit card or other personal identification means without personal verification means G07F7/02

Abstract

A method and system for providing line of credit information to participating banks that issue debit cards to owners of life insurance policies, wherein the cash surrender value of the life insurance policy has been assigned as collateral to secure the credit line on the individual'"'"'s (policy holder'"'"'s) debit card. The basis of this invention is the appreciation of the uniqueness in the collateral of the cash surrender value of a life insurance policy and the manner in which such collateral can be used to expedite the issuance and surveillance of debit card accounts. The system of this invention, (also hereinafter "assignee") provides line of credit information to participating debit card issuers and periodically monitors the line of credit for each of debit card holder whose line of credit is secured by the cash surrender value of his insurance policy. The manner of securing this line of credit effectively eliminates potential losses from default on such credit obligation.

Claims

1. A method for providing line of credit information to participating banks that issue debit cards to owners of life insurance policies, wherein the cash surrender value of said life insurance policies has been assigned to a system, selected from the group consisting of a credit clearing house or a lender, which provides credit information to said participating bank, by said policy owner, to secure a line of credit to the owner of the life insurance policies in excess of the debited account, comprising the steps of:

A. providing a system for storing and periodically updating the cash surrender values of the assigned life insurance policies in a computer memory;

B. computing said line of credit for a debit card holder based on said cash surrender values stored for each policy owner;

C. transmitting said line of credit information from said system to participating banks; and

D. monitoring periodically the assigned life insurance policies with said system for any incremental increase of said cash surrender values so that the line of credit for the debit card holder may be automatically upgraded.

2. The method set forth in claim 1, wherein said step of computing the line of credit is done with a general purpose computer and said step of transmitting said line of credit is done through modem means connected through a telephone network to said participating banks.

3. A system for providing line of credit information to participating banks that issue debit cards to owners of life insurance policies wherein the cash surrender value of said life insurance policies have been assigned to said system, which provides credit information to participating banks, by said owners to secure the debit card line of credit to the owner of the life insurance policies, comprising

A. memory means for storing and periodically updating said cash surrender values of assigned life insurance policies;

B. means for computing said line of credit from said stored cash surrender values of the assigned insurance policies according to a pre-determined formula;

C. means for transmitting said computed line of credit information from said system to said participating banks; and

D. means for periodically monitoring the assigned life insurance policies for any incremental increase of said cash surrender value so that the line of credit of the debit card holder may be automatically upgraded in said system.

4. The system set forth in claim 3, wherein said means for computing includes a general purpose computer and said means for transmitting includes modern means connected to said participating banks through a telephone network.

5. A method for computing line of credit information, as a basis for a lending institution extending credit to an individual based upon charge, credit and/or debit card purchases, wherein the amount of credit is further collateralized by a separate account in the lending institution, the improvement comprising:

providing a system having an assignment of the cash surrender value of the individual'"'"'s life insurance policy; and

collateralizing the line of credit extended to such individual by the lending institution with the individual'"'"'s assignment of the cash surrender value of his life insurance policy to said system.

6. A method for collateralization of a line of credit to secure a lender against default by a debtor, wherein said line of credit is secured by a pledge or assignment of property of the debtor, the improvement comprising:

A. obtaining from an applicant for credit, prior to extending credit, an assignment of cash surrender value from one or more insurance policies of said applicant, in favor of the lender, said assignment of cash surrender value being sufficient to secure the line of credit extended to said applicant.

B. monitoring the assigned insurance policies for verification of line of credit information.

7. The improvement of claim 6, wherein, the line of credit which is secured by the cash surrender value from the assigned life insurance policy is selected from the group consisting of the line of credit of a debit card and a credit card.

8. A method for securing a line of credit on a credit card or a debit card with the cash surrender value from insurance policies, said method comprising:

(A) providing means for storing and periodically updating information on insurance policies which have been assigned to secure a line of credit on a credit card or a line of credit for an overdraft on a debit card account;

(B) computing said line of credit for said credit card or debit card based upon the cash surrender value for each insurance policy owner;

(C) communicating said line of credit information to an entity issuing the line of credit on said credit or debit card; and

,

(D) monitoring the assigned insurance policies for verification of line of credit information.