Managing a life insurance investment

• US 8,306,899 B2
• Filed: 08/07/2001
• Issued: 11/06/2012
• Est. Priority Date: 08/07/2000
• Status: Expired due to Fees

• Current Assignee: Discovery Life Limited (Discovery Limited)
• Original Assignee: Discovery Life Limited (Discovery Limited)
• Inventors: Rabson, Kenneth Steven, Gore, Adrian, Mayers, Herschel Phillip
• Primary Examiner(s): Kazimi, Hani M
• Assistant Examiner(s): ONYEZIA, CHUKS N
• Application Number:
  US10/344,176
• Publication Number:
  US 20040030625A1
• Time in Patent Office: 4,109 Days
• Field of Search: 705/37, 705/4
• US Class Current: 705/37
• CPC Class Codes: G06Q 40/02 Banking, e.g. interest calculation or account maintenance credit or loans G06Q40/03
• CPC Class Codes: G06Q 40/06 Asset management; Financial planning or analysis

Abstract

A method of managing an investment of a policyholder which corresponds to a sum assured is described. The invention has particular application to life insurance. The policyholder selects a basic sum assured, and a periodic basic premium corresponding to the basic sum assured is calculated. The basic sum assured is linked to one or more financial indices so that the value of the total sum assured increases or decreases with changes in the value of the indices. An additional premium is calculated based on the cost of the linking, and a composite periodic premium is calculated. By using derivative instruments, the policyholder'"'"'s investment corresponds to the actual sum assured from inception of the policy, compared with conventional schemes which involve the periodic investment of the policyholder'"'"'s contributions.

Claims

1. A method of managing a policyholder'"'"'s investment in a life insurance fund managed by an insurance entity, the method comprising:

executing, with a processor on an information processing system, the following

recording a selection by a policyholder of a recurring premium risk insurance policy providing a basic sum assured to be paid in response to an event comprising at least one of a death of the policyholder and the policyholder attaining a prescribed age;

setting an initial investment of the policyholder in an insurance fund as correlated to the basic sum assured;

calculating a periodic basic premium based on the basic sum assured;

recording a selection of at least one predefined index;

linking the initial investment of the policyholder in the insurance fund to the predefined index;

periodically adjusting the initial investment of the policyholder in the insurance fund correlated with movements of the predefined index, wherein adjusting the initial investment creates an adjusted initial investment;

maintaining the adjusted initial investment in the insurance fund as an amount to be paid in the event comprising at least one of the death of the policyholder and the policyholder attaining the prescribed age;

calculating an additional premium based upon at least a performance of the initial investment of the policyholder in the insurance fund to the predefined index;

combining the basic premium which has been previously calculated and the additional premium which has been previously calculated to obtain a composite premium; and

periodically charging the policyholder the composite premium as a recurring premium of the recurring premium risk insurance policy selected by the policyholder.

2. The method according to claim 1, further comprising:

setting a reference level below which a value of the initial investment of the policyholder in the insurance fund may not decrease, irrespective of a performance of the predefined index that has been selected.

3. The method according to claim 2, wherein the reference level is the basic sum assured of the recurring premium risk insurance policy.

4. The method according to claim 1, further comprising:

selecting and applying a cost-price index to a value of the initial investment of the policyholder in the insurance fund to counteract inflation, wherein applying the cost-price index to the value of the initial invest increases the initial investment annually by a minimum amount related to an annual increase in the cost-price index.

5. The method according to claim 4, wherein the cost-price index is a consumer price index.

6. The method according to claim 1, wherein the predefined index to which the initial investment is linked to is one of a stock market related and a currency market index.

7. The method according to claim 6, wherein the stock market related index is one of

a FTSE 100 index,

a S&

P 500 index,

a Nikkei 225 index, and

a ALSI 40 index, and

wherein the currency market index is one of

a US dollar deposits index, and

a British pound deposits index.

8. The method of according to claim 1, further comprising:

recording a selection by the policyholder of at least one of a plurality of predefined future events that occur prior to the event comprising at least one of the death of the policyholder and the policyholder reaching the prescribed age which has been attained;

quantifying a selected insured amount, less than the basic sum assured, for each selected pre-defined future event; and

permitting the policyholder to draw the selected insured amount, wherein the selected insured amount has been adjusted based on the periodic adjustment the initial investment, on occurrence of each predefined future event.

9. The method according to claim 8, wherein the plurality of predefined future events include at least one of one of full disability, partial disability, “

dread diseases”

, infertility, and events affecting at least one of family members and children.

10. The method according to claim 8, wherein the selected insured amount associated with each pre-defined future event is unrelated to at least one of costs of treatment and other costs associated with the pre-defined future event.

11. The method according to claim 1, further comprising:

correlating a performance of initial investment of the policyholder in the insurance fund to a health index determined for the policyholder;

calculating the health index by comparing a plurality of at least one of test values and measurement values of the policyholder to a set of predetermined reference values;

determining a set of differentials between the at least one of test values and measurement values and the set of predetermined reference values; and

adjusting the performance of initial investment of the policyholder in the insurance fund according to the set of differentials determined.

12. A method of managing a policyholder'"'"'s investment in a life insurance fund managed by an insurance entity, the method comprising:

executing, with a processor on an information processing system, the following

recording a selection by a policyholder of a recurring premium risk insurance policy providing a basic sum assured to be paid in response to an event comprising at least one of a death of the policyholder and the policyholder attaining a prescribed age;

setting an initial investment of the policyholder in an insurance fund as correlated to the basic sum assured;

calculating a periodic basic premium based on the basic sum assured;

recording a selection of at least one predefined index;

linking the initial investment of the policyholder in the insurance fund to the predefined index;

modeling an expected future performance of the predefined index;

determining a modeled investment growth of the initial investment based on the expected future performance of the predefined index that has been modeled;

determining a set of probabilities associated with paying a claim to the policyholder, including paying the claim with the modeled investment growth, at various durations of a term of the recurring premium risk insurance policy;

calculating an additional premium based upon the expected future performance that has been modeled, the investment growth that has been modeled, and the set of probabilities that has been determined;

combining the basic premium which has been previously calculated and the additional premium which has been previously calculated to obtain a composite premium; and

periodically charging the policyholder the composite premium as a recurring premium of the recurring premium risk insurance policy selected by the policyholder.

13. The method according to claim 12, wherein the composite premium does not vary with changes in a value of the predefined index over time.