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

• US 8,108,298 B2
• Filed: 09/20/2010
• Issued: 01/31/2012
• 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: Tatro, Charles D., Taylor, Jason F., Wiland, David P.
• Primary Examiner(s): Tinkler, Muriel
• Application Number:
  US12/885,970
• Publication Number:
  US 20110010310A1
• Time in Patent Office: 498 Days
• Field of Search: 705/35, 705/36.R, 705/37
• US Class Current: 705/37
• 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 for administering 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 processing data associated with a deferred variable annuity contract during the accumulation phase, including data indicative of a payment base value, a withdrawal factor value, a contract value, and an amount of benefit payments available on a periodic basis in accordance with a guarantee of minimum periodic withdrawals available for a term, calculated employing the payment base value and the withdrawal factor value, said system comprising:

a storage device storing data relating to the annuity contract, the stored data comprising data indicative of a present payment base value, a present contract value, one or more contract values previously attained at periodic time intervals, a maximum increase in the payment base value and the withdrawal factor value;

a processor in communication with the storage device, the processor configured to;

compare the present contract value to a highest of the previously attained contract values as determined at periodic time intervals;

responsive to determining that the present contract value is greater than the highest of the previously attained contract values as determined at periodic time intervals, determine a stepped-up payment base value, the stepped-up payment base value being a lesser of the present contract value and the present payment base value increased by the maximum increase, the maximum increase being greater than zero;

store data indicative of the stepped-up payment base value in the storage device; and

determine a benefit payment amount available for withdrawal without reducing the payment base value employing the stepped-up payment base value and the withdrawal factor value.

2. The data processing system of claim 1, wherein the processor is further configured to provide an output signal having data indicative of the stepped-up payment base value.

3. The data processing system of claim 1, further comprising, in communication with the processor, a payment module for making a benefit payment to a relevant life.

4. The data processing system of claim 1, wherein the processor is further configured to, responsive to receipt of data indicative of a request for withdrawal from the relevant life, provide an output signal to the payment module having data indicative of an amount of a benefit payment.

5. The data processing system of claim 1, wherein the processor is further configured to provide an output signal having data indicative of instructions to communicate the stepped-up payment base value to a relevant life.

6. The data processing system of claim 1, wherein the storage device further stores data indicative of a value of a rider charge, and the processor is further configured to determine a value of a rider fee by multiplying the value of the rider charge by the present payment base value, and to deduct the value of the rider fee from the highest of the previously attained contract values as determined at periodic time intervals prior to comparing the present contract value to a highest of the previously attained contract values at periodic time intervals.

7. The data processing system of claim 1, wherein the storage device further stores data indicative of availability of the benefit payment to a relevant life for the lifetime of the relevant life.

21. The data processing system of claim 1, wherein the maximum increase is a maximum percentage increase and the withdrawal factor value is a withdrawal percent value.

8. A computer-implemented method for processing data associated with a deferred variable annuity contract during the accumulation phase, the data including data indicative of a contract value, a payment base value, a withdrawal factor value, and benefit payments available periodically in accordance with a guarantee, the benefit payments having a value based on the payment base value and the withdrawal factor value, comprising:

accessing by a processor from a data storage device data relating to the annuity contract, the accessed data comprising a present payment base value, a present contract value, one or more contract values previously attained at periodic time intervals, a maximum increase in the payment base value and the withdrawal factor value;

comparing by the processor the present contract value to a highest of the previously attained contract values as determined at periodic time intervals;

responsive to determining that the present contract value is greater than the highest of the previously attained contract values as determined at periodic time intervals, determining by the processor a stepped-up payment base value, the stepped-up payment base value being a lesser of the present contract value and the present payment base value increased by the maximum increase, the maximum increase being greater than zero; and

storing by the processor data indicative of the stepped-up payment base value in the data storage device.

9. The computer-implemented method of claim 8, further comprising determining by the processor a benefit payment amount available for withdrawal during a period without reducing the payment base value responsive to the stepped-up payment base value and the withdrawal factor value.

10. The computer-implemented method of claim 8, further comprising providing by the processor an output signal including data indicative of the stepped-up payment base value, and

communicating the stepped-up payment base value to a relevant life.

11. The computer-implemented method of claim 8, further comprising making a payment to a relevant life responsive to receipt of a request from the relevant life for a payment.

12. The computer-implemented method of claim 11, further comprising comparing an amount of the payment to a product of the stepped-up payment base value and the withdrawal factor value, and, responsive to determining that the amount of the payment is greater than the product of the stepped-up payment base value and the withdrawal factor value, determining a reduced payment base value.

22. The computer-implemented method of claim 8, wherein the maximum increase is a maximum percentage increase and the withdrawal factor value is a withdrawal percent value.

13. A tangible computer-readable medium having processor-executable instructions stored thereon, which instructions, when executed by a processor, cause the processor to:

access from a data storage device data relating to an annuity contract, the accessed data comprising a present payment base value, a present contract value, a highest contract value previously attained at periodic time intervals, and a withdrawal percent value;

compare the present contract value to the highest contract value;

responsive to determining that the present contract value is greater than the highest contract value, determine a stepped-up payment base value, the stepped-up payment base value being a lesser of the present contract value and the present payment base value increased by a maximum step up, the maximum step up being greater than zero;

determine a benefit payment amount available for withdrawal, in accordance with a guarantee of benefit payment amounts available on a periodic basis, without reducing the payment base value responsive to the stepped-up payment base value and the withdrawal percent value; and

store data indicative of the stepped-up payment base value and the determined benefit payment amount in the data storage device.

14. The tangible computer-readable medium of claim 13, wherein the instructions further cause the processor to, responsive to determining that the present contract value is not greater than the highest contract value, provide an output signal having data indicative that the payment base value is not stepped up.

15. The tangible computer-readable medium of claim 13, wherein the instructions further cause the processor to, responsive to receipt of data indicative of a request for a withdrawal from a relevant life, provide an output signal to a payment module having data indicative of a direction to effect payment to the relevant life.

16. The tangible computer-readable medium of claim 15, wherein the instructions further cause the processor to, responsive to receipt of the data indicative of request for the withdrawal from the relevant life, determine a total of withdrawals during a current period, compare the total to the determined benefit payment amount and, responsive to determining that the total is greater than the determined benefit payment amount, determine a reduced payment base value.

17. The tangible computer-readable medium of claim 15, wherein the instructions further cause the processor to, responsive to receipt of the data indicative of the request for the withdrawal from the relevant life, determine a total of withdrawals during a current period, compare the total to the determined benefit payment amount and, responsive to determining that the total is not greater than the determined benefit payment amount, provide an output signal having data indicative of instructions to communicate to the relevant life that the withdrawal is made without reduction of the payment base value.

18. The tangible computer-readable medium of claim 13, wherein the instructions further cause the processor to provide an output signal having data indicative of instructions to communicate the stepped-up payment base value and the determined benefit payment amount to a relevant life.

19. The tangible computer-readable medium of claim 13, wherein the instructions further cause the processor to provide an output signal having data indicative that the determined benefit payment amount is an amount available for withdrawal during a year period during an accumulation phase of the annuity contract without reduction of the payment base value.

20. The tangible computer-readable medium of claim 13, wherein the instructions further cause the processor to provide an output signal having data indicative of a guarantee of annual benefit payments up to the determined benefit payment amount for a lifetime of a relevant life.

23. The tangible computer-readable medium of claim 13, wherein the maximum step up is a maximum step up percentage.