System for underwriting a combined joint life and long term care insurance policy which is actuarially responsive to long term care demands and life expectancies of the individual insureds

• US 6,584,446 B1
• Filed: 06/10/1994
• Issued: 06/24/2003
• Est. Priority Date: 02/14/1990
• Status: Expired due to Term

• Current Assignee: The State Life Insurance Co. (Investment Portfolio) (American United Mutual Insurance Holding Company)
• Original Assignee: Golden Rule Insurance Company (UnitedHealth Group Incorporated)
• Inventors: Buchanan, William M., Drake, Jeffrey S.
• Primary Examiner(s): Rinehart, Mark H.
• Assistant Examiner(s): CHUNG TRANS, XUONG MY
• Application Number:
  US08/257,945
• Time in Patent Office: 3,301 Days
• Field of Search: 364/401, 364/406, 364/413.01, 364/408, 705/4
• US Class Current: 705/4
• CPC Class Codes: G06Q 40/08 Insurance

Abstract

Sets of future risk expectation strings for long term care and for life expectancy are categorized into a plurality of Joint Equal Age Risk Classifications, upon which risk exposure sequencing and present risk value analysis are applied to calculate joint equal age present risk values that are inputted into a Joint Equal Age Risk Chart; future risk expectation strings for long term care and for life expectancy are also categorized into a plurality of Age Differential Classifications, which are distinct and independent from the separately categorized Joint Equal Age Classifications. Risk exposure sequencing and present risk value analysis are applied to calculate temporary joint equal age present risk values and temporary differential present risk values, which are compared to generate temporary age equivalence differentials that are inputted into a temporary age equivalence matrix from which an age differential adjustment factors are drawn and inputted into an Age Differential Adjustment Chart. The so constructed Joint Equal Age and Age Differential Adjustment Charts are then used, in combination, to form the basis for rate structuring of an insurance product covering joint long term care and life benefits.

Claims

1. A computerized system for underwriting a combined, joint life and long term care insurance policy which is actuarially responsive to the long term care expectations and life expectancies of the individuals being insured, said system comprising:

means for generating a set of future risk expectation strings for long term care for an individual insured, categorized by age, sex, and smoking status, and for generating a set of future risk expectation strings for life expectancy for an individual insured, categorized by age, sex, and smoking status;

means for processing said set of future risk expectation strings for long term care and said set of future expectation strings for life expectancy by applying risk exposure sequencing and present risk value analysis to said long term care and life expectancy risk expectation string values for joint equal age to generate joint equal age present risk values;

means for processing said joint equal age present risk values to generate a Joint Equal Age Risk data matrix;

means for categorizing said sets of future risk expectation strings for long term care and for life expectancy into a plurality of Age Differential Classifications;

means for processing each of said Age Differential Classifications (ADC) over a range of possible age differentials (W) between joint insureds, including;

a) means for applying risk exposure sequencing and present risk value analysis to generate temporary joint equal age present risk values (JEA) over a range of possible issue ages (i);

b) for each older issue age (x);

1) means for applying risk exposure sequencing to generate a temporary differential present risk value (ADF[x,x−

W]);

2) means for comparing said temporary differential present risk value ADF[x,x−

W] with said temporary joint equal age present risk values (JEA), and selecting the crossover point where ADF[x,x−

W]<

JEA[(i−

1)] and ADF[x,x−

W]>

JEA[i]; and

3) means for storing the crossover point differential (x−

i) into a temporary age equivalence matrix;

c) means for analyzing a completed temporary age equivalence matrix for a given ADC and W to select an age differential adjustment factor for said ADC and W, and

d) means for storing said selected age differential adjustment factor into an Age Differential Adjustment data matrix; and

means for generating Joint Equal Age and Age Differential Adjustment Charts from said Joint Equal Age and Age Differential Adjustment data matrices for use in rate structuring an insurance product covering joint long term care and life benefits.

2. The computerized system for underwriting a combined, joint life and long term care insurance policy which is actuarially responsive to the long term care expectations and life expectancies of the individuals being insured of claim 1 including means for categorizing said risk expectation strings into four Joint Equal Age Risk Classifications, and wherein said Joint Equal Age Risk Classifications are:

a) a first joint equal age classification including two non-smoking females, two females (one smoking), and a male and female (both non-smoking);

b) a second joint equal age classification including a male and female (one smoking), two non-smoking males, and two smoking females;

c) a third joint equal age classification including two males (one smokes), and a male and female (both smoke); and

d) a fourth joint equal age classification including two smoking males.

3. The computerized system for underwriting a combined, joint life and long term care insurance policy which is actuarially responsive to the long term care expectations and life expectancies of the individuals being insured of claim 2 wherein:

said Age Differential Classifications are;

a) a first age differential classification including two males;

b) a second age differential classification including a male and female, with the older insured being the male;

c) a third age differential classification including a male and female, with the older insured being the female; and

d) a fourth age differential classification including two females.

4. The computerized system for underwriting a combined, joint life and long term care insurance policy which is actuarially responsive to the long term care expectations and life expectancies of the individuals being insured of claim 3 wherein:

said each of said Age Differential Classifications further include subcategories where;

1) both insureds are non-smokers;

2) the older insured is a smoker and the younger insured is a non-smoker;

3) the older insured is a non-smoker and the younger insured is a smoker; and

where

4) both insureds are smokers.

5. The computerized system for underwriting a combined, joint life and long term care insurance policy which is actuarially responsive to the long term care expectations and life expectancies of the individuals being insured of claim 1 wherein:

said Age Differential Classifications are;

a) a first age differential classification including two males;

b) a second age differential classification including a male and female, with the older insured being the male;

c) a third age differential classification including a male and female, with the older insured being the female; and

d) a fourth age differential classification including two females.

6. The computerized system for underwriting a combined, joint life and long term care insurance policy which is actuarially responsive to the long term care expectations and life expectancies of the individuals being insured of claim 5 wherein:

said each of said Age Differential Classifications further include subcategories where;

1) both insureds are non-smokers;

2) the older insured is a smoker and the younger insured is a non-smoker;

3) the older insured is a non-smoker and the younger insured is a smoker; and

where

4) both insureds are smokers.

7. A computerized system for underwriting a combined, joint life and long term care insurance policy which is actuarially responsive to the long term care expectations and life expectancies of the individuals being insured, said system comprising:

means for generating a set of future risk expectation strings for long term care for an individual insured, categorized by age, sex, and smoking status, and for generating a set of future risk expectation strings for life expectancy for an individual insured, categorized by age, sex, and smoking status;

means for categorizing possible risk categories into a plurality of Joint Equal Age Risk Classifications;

means for processing said set of future risk expectation strings for long term care into a plurality of blended long term care risk classifications of joint equal age;

means for processing said set of future risk expectation strings for life expectancy into a plurality of blended life expectancy risk classifications of joint equal age;

said blended set of future risk expectation strings for long term care and said blended set of future risk expectation strings for life expectancy for a given Joint Equal Age Risk Classification, in combination, forming a set of blended risk expectation strings for said Joint Equal Age Classification;

for each Joint Equal Age Risk Classification and each issue age, means for applying risk exposure sequencing and present risk value analysis to said blended joint equal age risk expectation strings for said given Joint Equal Age Risk Classification to generate a joint equal age present risk value, and means for storing said joint equal age present risk value for said given Joint Equal Age Risk Classification and issue age into a Joint Equal Age Risk data matrix;

means for categorizing said unblended sets of future risk expectation strings for long term care and for life expectancy into a plurality of Age Differential Classifications, said Age Differential Classifications being distinct and independent from said Joint Equal Age Classifications;

means for processing each of said Age Differential Classifications (ADC) over a range of possible age differentials (W) between joint insureds to select an age differential adjustment factor for each of said ADCs and Ws;

means for storing said selected age differential adjustment factors into an Age Differential Adjustment data matrix; and

means for generating Joint Equal Age and Age Differential Charts from said Joint Equal Age and Age Differential Adjustment data matrices for use in rate structuring an insurance product covering joint long term care and life benefits.

8. The computerized system for underwriting a combined, joint life and long term care insurance policy which is actuarially responsive to the long term care expectations and life expectancies of the individuals being insured of claim 7 wherein:

said Joint Equal Age Risk Classifications are;

a) a first joint equal age classification including two non-smoking females, two females (one smoking), and a male and female (both non-smoking);

b) a second joint equal age classification including a male and female (one smoking), two non-smoking males, and two smoking females;

c) a third joint equal age classification including two males (one smokes), and a male and female (both smoke); and

d) a fourth joint equal age classification including two smoking males.

9. The computerized system for underwriting a combined, joint life and long term care insurance policy which is actuarially responsive to the long term care expectations and life expectancies of the individuals being insured of claim 8 wherein:

said Age Differential Classifications are;

a) a first age differential classification including two males;

b) a second age differential classification including a male and female, with the older insured being the male;

c) a third age differential classification including a male and female, with the older insured being the female; and

d) a fourth age differential classification including two females.

10. The computerized system for underwriting a combined, joint life and long term care insurance policy which is actuarially responsive to the long term care expectations and life expectancies of the individuals being insured of claim 9 wherein:

said each of said Age Differential Classifications further include subcategories where;

1) both insureds are non-smokers;

2) the older insured is a smoker and the younger insured is a non-smoker;

3) the older insured is a non-smoker and the younger insured is a smoker; and

where

4) both insureds are smokers.

11. The computerized system for underwriting a combined, joint life and long term care insurance policy which is actuarially responsive to the long term care expectations and life expectancies of the individuals being insured of claim 7 wherein:

said Age Differential Classifications are;

a) a first age differential classification including two males;

b) a second age differential classification including a male and female, with the older insured being the male;

c) a third age differential classification including a male and female, with the older insured being the female; and

d) a fourth age differential classification including two females.

12. The computerized system for underwriting a combined, joint life and long term care insurance policy which is actuarially responsive to the long term care expectations and life expectancies of the individuals being insured of claim 11 wherein:

said each of said Age Differential Classifications further include subcategories where;

1) both insureds are non-smokers;

2) the older insured is a smoker and the younger insured is a non-smoker;

3) the older insured is a non-smoker and the younger insured is a smoker; and

where

4) both insureds are smokers.

13. A computerized system for underwriting a combined, joint life and long term care insurance policy which is actuarially responsive to the long term care expectations and life expectancies of the individuals being insured, said system comprising:

means for generating a set of future risk expectation strings for long term care for an individual insured, categorized by age, sex, and smoking status, and for generating a set of future risk expectation strings for life expectancy for an individual insured, categorized by age, sex, and smoking status; and

processor means for processing each of said sets of future risk expectation strings for long term care and for life expectancy for an individual insured to generate a Joint Equal Age Risk Chart and an Age Differential Adjustment Chart for use in rate structuring an insurance product covering joint long term care and life benefits, said processor means including;

means for categorizing said set of future risk expectation strings for long term care and said set of future risk expectation strings for life expectancy for an insured into a plurality of Joint Equal Age Risk Classifications;

for each Joint Equal Age Risk Classification and each issue age, means for applying risk exposure sequencing and present risk value analysis to generate a joint equal age present risk value, and inputting said joint equal age present risk value for said given Joint Equal Age Risk Classification and issue age into a Joint Equal Age Risk data matrix;

means for categorizing said sets of future risk expectation strings for long term care and for life expectancy into a plurality of Age Differential Classifications, said Age Differential Classifications being distinct and independent from said Joint Equal Age Classifications;

for each of said Age Differential Classifications (ADC) and for a range of possible age differentials (W) between joint insureds;

a) means for applying risk exposure sequencing and present risk value analysis to generate temporary joint equal age present risk values (JEA) for a range of possible issue ages (i);

b) for each older issue age (x);

1) means for applying risk exposure sequencing to generate a temporary differential present risk value (ADF[x,x−

W]);

2) means for comparing said temporary differential present risk value ADF[x,x−

W] with said temporary joint equal age present risk values (JEA), and selecting a temporary age equivalence differential; and

3) means for inputting said temporary age equivalence differential into a temporary age equivalence matrix;

c) means for analyzing a completed temporary age equivalence matrix for a given ADC and W to select an age differential adjustment factor for said ADC and W, and

d) means for inputting said selected age differential adjustment factor into an Age Differential Adjustment data matrix; and

means for generating Joint Equal Age and Age Differential Adjustment Charts from said Joint Equal Age and Age Differential Adjustment data matrices for use in rate structuring an insurance product covering joint long term care and life benefits.

14. The computerized system for underwriting a combined, joint life and long term care insurance policy which is actuarially responsive to the long term care expectations and life expectancies of the individuals being insured of claim 13 wherein:

said Joint Equal Age Risk Classifications are;

a) a first joint equal age classification including two non-smoking females, two females (one smoking), and a male and female (both non-smoking);

b) a second joint equal age classification including a male and female (one smoking), two non-smoking males, and two smoking females;

c) a third joint equal age classification including two males (one smokes), and a male and female (both smoke); and

d) a fourth joint equal age classification including two smoking males.

15. The computerized system for underwriting a combined, joint life and long term care insurance policy which is actuarially responsive to the long term care expectations and life expectancies of the individuals being insured of claim 14 wherein:

said Age Differential Classifications are;

a) a first age differential classification including two males;

b) a second age differential classification including a male and female, with the older insured being the male;

c) a third age differential classification including a male and female, with the older insured being the female; and

d) a fourth age differential classification including two females.

16. The computerized system for underwriting a combined, joint life and long term care insurance policy which is actuarially responsive to the long term care expectations and life expectancies of the individuals being insured of claim 15 wherein:

said each of said Age Differential Classifications further include subcategories where;

1) both insureds are non-smokers;

2) the older insured is a smoker and the younger insured is a non-smoker;

3) the older insured is a non-smoker and the younger insured is a smoker; and

where

4) both insureds are smokers.

17. The computerized system for underwriting a combined, joint life and long term care insurance policy which is actuarially responsive to the long term care expectations and life expectancies of the individuals being insured of claim 13 wherein:

said Age Differential Classifications are;

a) a first age differential classification including two males;

b) a second age differential classification including a male and female, with the older insured being the male;

c) a third age differential classification including a male and female, with the older insured being the female; and

d) a fourth age differential classification including two females.

18. The computerized system for underwriting a combined, joint life and long term care insurance policy which is actuarially responsive to the long term care expectations and life expectancies of the individuals being insured of claim 17 wherein:

said each of said Age Differential Classifications further include subcategories where;

1) both insureds are non-smokers;

2) the older insured is a smoker and the younger insured is a non-smoker;

3) the older insured is a non-smoker and the younger insured is a smoker; and

where

4) both insureds are smokers.