SYSTEM AND METHOD FOR PROCESSING DATA RELATED TO A LIFE INSURANCE POLICY HAVING A DEATH BENEFIT PAYABLE BASED ON AGE OF A LIVING INSURED

• US 20120209631A1
• Filed: 04/08/2011
• Published: 08/16/2012
• Est. Priority Date: 02/10/2011
• Status: Abandoned Application

• Current Assignee: Prudential Insurance Company of America (Prudential Financial Incorporated)
• Original Assignee: Hartford Fire Insurance Company (The Hartford Financial Services Group, Inc.)
• Inventors: Roscoe, Michael J., Barron, Edwin Clifford Jr., Proch, Lisa Michelle, Li, Haobo
• Application Number:
  US13/082,964
• Publication Number:
  US 20120209631A1
• Time in Patent Office: Days
• US Class Current: 705/4
• CPC Class Codes: G06Q 40/08 Insurance

Abstract

A computer system for processing of data related to a permanent life insurance policy includes a data storage device storing data indicative of a policy owner, an insured under the policy, and a death benefit amount, payable under the policy to a beneficiary upon death of the insured, and a processor in communication with the data storage device. A withdrawal benefit providing periodic payments to the owner, each payment reducing the amount of the death benefit until reaching a residual death benefit amount, is available on owner request, at a minimum age of the insured, on meeting a condition related to a likelihood of policy lapse prior to death of the insured. The processor is configured to determine whether premium payments in accordance with a schedule will cause the condition to be met.

Claims

1. A computer system for processing data related to a permanent life insurance policy having a death benefit, comprising:

a data storage device storing data indicative of a policy owner, an insured under the policy, a death benefit amount, payable under the policy to a beneficiary upon death of the insured, a schedule of premium payments, and a withdrawal benefit in the nature of periodic payments payable to the policy owner upon request and on condition of the insured being living and having reached a minimum age achieved at a benefit eligibility date, and on condition of a policy protection account having at least a target balance, each payment reducing the amount of the death benefit until a residual death benefit amount is reached; and

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

determine a current policy protection account balance based on premium payments received, charges based on policy face value, interest credited on balances and charges based on riders;

determine, based on the policy protection account balance, the schedule of premium payments, and the benefit eligibility date, whether premium payments in accordance with the schedule will cause the policy protection account balance to reach the target balance by the benefit eligibility date; and

provide an output signal having data indicative of the determination whether premium payments in accordance with the schedule will cause the policy protection account balance to reach the target balance by the benefit eligibility date.

2. The computer system of claim 1, wherein the processor is further configured to, responsive to determining that the premium payments in accordance with the schedule will cause the policy protection account balance to reach the target balance by the benefit eligibility date, provide data indicative of instructions to provide a communication to the owner that the owner is on target for eligibility for the withdrawal benefit as of the benefit eligibility date.

3. The computer system of claim 1, wherein the processor is further configured to, responsive to determining that the premium payments in accordance with the schedule will not cause the policy protection account balance to reach the target balance by the benefit eligibility date, determine a new premium schedule that will cause the policy protection account balance to reach the target balance by the benefit eligibility date, and to provide an output signal having data indicative of the new premium schedule.

4. The computer system of claim 3, wherein the processor is further configured to provide data indicative of instructions to provide a communication to the owner of the new premium schedule.

5. The computer system of claim 1, wherein the processor is configured to determine a current policy protection account balance further based on withdrawals from the policy and policy loans.

6. The computer system of claim 1, wherein the processor is further configured to determine a current policy protection account balance by:

accessing a prior policy protection account balance;

adding to the prior policy protection account balance a portion of premiums received subsequent to date of prior policy protection account balance;

adding to the policy protection account balance interest equal to the interest at a credited interest rate on the prior policy protection account balance for a period subsequent to the date of the prior policy protection account balance; and

subtracting from the policy protection account balance a percentage of a policy face value.

7. The computer system of claim 1, wherein the processor is configured to provide an output signal having data indicative of instructions to communicate to the owner that, upon receipt of certification of a medical condition of the insured, and independent of age of the insured, the owner is eligible to receive periodic payments reducing the death benefit.

8. A computer-implemented method for processing data related to a permanent life insurance policy having an owner and a death benefit payable to a beneficiary upon death of an insured, comprising:

accessing by a processor from a data storage device data indicative of a prior policy protection account value, a policy face value, rates for one or more charges, and an interest rate;

determining by the processor, a current policy protection account balance based on premium payments received, charges determined based on the policy face value and the rates and the interest rate;

accessing by the processor from the data storage device data indicative of a schedule of premium payments, a benefit eligibility date and a target balance for the policy protection account, wherein the owner is eligible for a withdrawal benefit in the nature of periodic payments payable to the owner upon request and on condition of the insured being living and having reached a minimum age achieved at the benefit eligibility date, and on condition of the policy protection account having at least the target balance as of the benefit eligibility date, each payment reducing the amount of the death benefit until a residual death benefit amount is reached;

determining by the processor, based on the policy protection account balance, the schedule of premium payments, and the benefit eligibility date, whether premium payments in accordance with the schedule will cause the policy protection account balance to reach the target balance by the benefit eligibility date; and

providing by the processor an output signal having data indicative of the determination whether premium payments in accordance with the schedule will cause the policy protection account balance to reach the target balance by the benefit eligibility date.

9. The computer-implemented method of claim 8, further comprising, responsive to determining that the premium payments in accordance with the schedule will not cause the policy protection account balance to reach the target balance by the benefit eligibility date, determining a new premium schedule that will cause the policy protection account balance to reach the target balance by the benefit eligibility date, and providing an output signal having data indicative of the new premium schedule.

10. The computer-implemented method of claim 9, further comprising providing data indicative of instructions to provide a communication to the owner of the new premium schedule.

11. The computer-implemented method of claim 8, wherein a maximum amount of the withdrawal benefit is based on the death benefit amount as of a date of request for the withdrawal benefit.

12. The computer-implemented method of claim 8, the minimum age is at least 85 years.

13. The computer-implemented method of claim 8, wherein the schedule of premium payments provides a single premium.

14. The computer-implemented method of claim 8, further comprising, responsive to receipt of data indicative of certification of a medical condition of the insured, providing an output signal having data indicative of instructions to provide periodic payments to the owner, the periodic payments reducing the death benefit amount.

15. A non-transitory computer-readable medium, the computer-readable medium having processor-executable instructions stored thereon, which instructions, when executed by the processor, cause the processor to:

access from a data storage device data indicative of a prior policy protection account value, a policy face value, rates for one or more charges, and an interest rate;

determine a current policy protection account balance based on premium payments received, charges determined based on the policy face value and the rates and the interest rate;

access from the data storage device data indicative of a schedule of premium payments, a benefit eligibility date and a target balance for the policy protection account, wherein the owner is eligible for a withdrawal benefit in the nature of periodic payments payable to the owner upon request and on condition of the insured being living and having reached a minimum age achieved at the benefit eligibility date, and on condition of the policy protection account having at least the target balance as of the benefit eligibility date, each payment reducing the amount of the death benefit until a residual death benefit amount is reached;

determine by the processor, based on the policy protection account balance, the schedule of premium payments, and the benefit eligibility date, whether premium payments in accordance with the schedule will cause the policy protection account balance to reach the target balance by the benefit eligibility date; and

provide an output signal having data indicative of the determination whether premium payments in accordance with the schedule will cause the policy protection account balance to reach the target balance by the benefit eligibility date.

16. The non-transitory computer-readable medium of claim 15, wherein the policy is a universal life insurance policy.

17. The non-transitory computer-readable medium of claim 16, wherein the periodic payments are monthly and equal to a percentage between 0.5% and 2.5% of the death benefit upon commencement of the periodic payments.

18. The non-transitory computer-readable medium of claim 16, wherein an owner may select an amount of the periodic payments less than an available amount.

19. The non-transitory computer-readable medium of claim 16, wherein the instructions further cause the processor to, responsive to determining that the premium payments in accordance with the schedule will not cause the policy protection account balance to reach the target balance by the benefit eligibility date, determine a new premium schedule that will cause the policy protection account balance to reach the target balance by the benefit eligibility date, and provide an output signal having data indicative of the new premium schedule.

20. A computer system for processing data related to a permanent life insurance policy having a death benefit, comprising:

a data storage device storing data indicative of a policy owner, an insured under the policy, a death benefit amount, payable under the policy to a beneficiary upon death of the insured, and a withdrawal benefit in the nature of periodic payments payable to the policy owner upon request and on condition of the insured being living and having reached a minimum age achieved at a benefit eligibility date, and on a condition related to a likelihood of policy lapse prior to death of the insured, each payment reducing the amount of the death benefit until a residual death benefit amount is reached; and

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

determine, based on the schedule of premium payments, and the benefit eligibility date, whether premium payments in accordance with the schedule will cause the condition related to a likelihood of policy lapse prior to death of the insured to be met; and

provide an output signal having data indicative of the determination whether premium payments in accordance with the schedule will cause the condition related to a likelihood of policy lapse prior to death of the insured to be met.

21. The computer system of claim 20, wherein the condition related to a likelihood of policy lapse prior to death of the insured comprises a threshold value of a factor based on amount and timing of premiums paid and policy face value.

22. The computer system of claim 21, wherein the threshold value of the factor comprises a minimum value of the factor at the benefit eligibility date.

23. The computer system of claim 20, wherein the processor is further configured to, responsive to determining that the premium payments in accordance with the schedule will not cause the condition to be met, determine a new premium schedule that will cause the condition to be met, and to provide an output signal having data indicative of the new premium schedule.

24. A computer-implemented method for processing data related to a permanent life insurance policy having a death benefit, comprising:

accessing by the processor from a data storage device data indicative of a schedule of premium payments, wherein the owner is eligible for a withdrawal benefit in the nature of periodic payments payable to the owner upon request and on satisfying a condition related to a likelihood of policy lapse prior to death of the insured;

determining by the processor, based on the schedule of premium payments, whether premium payments in accordance with the schedule will cause the condition to be met; and

providing by the processor an output signal having data indicative of the determination whether premium payments in accordance with the schedule will cause the condition to be met.

25. The computer-implemented method of claim 24, wherein the condition related to a likelihood of policy lapse prior to death of the insured comprises a threshold value of a factor based on amount and timing of premiums paid, policy face value, and policy loans.

26. The computer-implemented method of claim 25, wherein the threshold value of the factor comprises a minimum value of the factor at the benefit eligibility date, the value of the factor being increased by premium payments and reduced by policy loans.

27. The computer-implemented method of claim 24, further comprising, responsive to determining that the premium payments in accordance with the schedule will not cause the condition to be met, determining a new premium schedule that will cause the condition to be met, and providing an output signal having data indicative of the new premium schedule.

28. A computer system for processing data related to a permanent life insurance policy having an owner and a death benefit payable to a beneficiary upon death of an insured, comprising:

a data storage device having stored therein data indicative of the policy owner, the insured, and the death benefit amount; and

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

receive data indicative of a request from the policy owner for an accelerated death benefit payment,

determine whether the insured has reached a minimum age,

responsive to determining that the insured has reached the minimum age, providing an output signal having data indicative of instructions to make periodic payments to the owner, and

determine, responsive to each of the periodic payments, a reduced amount of the death benefit.

29. The computer system of claim 28, wherein the processor is further configured to provide an output signal having data indicative of instructions to cease the periodic payments responsive to receiving data indicative of death of the insured.

30. The computer system of claim 28, wherein the processor is configured to determine a maximum available amount of the periodic payments based on a death benefit amount and a fraction of the death benefit amount, the maximum annually available amount being between 6% and 18% of the death benefit.

31. The computer system of claim 28, wherein the minimum age is at least 85 years.

32. The computer system of claim 28, wherein the processor is further configured to, responsive to receipt of data indicative of a medical condition of the insured, provide an output signal with data to provide periodic payments for a medical condition to the owner, the periodic payments for a medical condition reducing the death benefit amount.

33. The computer system of claim 32, wherein the medical condition of the insured comprises a chronic illness, wherein a chronic illness is one of:

unable to perform without substantial assistance from another individual at least two activities of daily living and requiring substantial supervision from another individual to protect the insured from threats to health and safety due to a severe cognitive impairment.

34. The computer system of claim 33, wherein the processor is further configured to, responsive to receiving a request for periodic payments based on minimum age, and of a medical condition of the insured, provide payments based only on one of minimum age and a medical condition.

35. The computer system of claim 34, wherein the periodic payments based on the minimum age of the insured are a smaller proportion of the death benefit than the periodic payments based on a medical condition.

36. A computer system for generating retirement plan illustrations, comprising:

a storage device storing data indicative of rates and rules for a permanent life insurance policy having a withdrawal benefit, in the nature of periodic payments based in amount on the death benefit and reducing the death benefit until a residual death benefit amount is reached, available based on a minimum age of an insured, and

a processor configured to;

receive data indicative of a retirement plan for at least an insured, comprising contribution data over a time period, growth data related to the contributions, and retirement income and asset assumptions;

generate an illustration for the retirement plan with a permanent life insurance policy having a withdrawal benefit, with premiums reducing the contribution data, the processor being configured to calculate the reduced contribution data and reduced retirement income and asset assumptions, and to calculate and include in the illustration income data based on the withdrawal benefit commencing at the minimum age of the insured.

37. The computer system of claim 36, wherein the minimum age is at least age 85.

38. The computer system of claim 36, wherein the illustration further comprises an amount of the death benefit under the permanent life insurance policy.

39. A computer-implemented method for generating retirement plan illustrations, comprising:

accessing by a processor from a data storage device data indicative of a retirement plan for at least an insured, comprising contribution data over a time period, growth data related to the contributions, and retirement income and asset assumptions;

generating by the processor an illustration for the retirement plan with a permanent life insurance policy having a withdrawal benefit available at a fixed age of the insured, the withdrawal benefit being in the nature of periodic payments based in amount on the death benefit and reducing the death benefit until a residual death benefit amount is reached, with premiums reducing the contribution data, the generating comprising calculating the reduced contribution data and reduced retirement income and asset assumptions, and calculating and including in the illustration income data based on the periodic payments commencing at a minimum age of the insured.

40. The computer-implemented method of claim 39, further comprising displaying, by a display device in communication with the processor, the illustration.

41. The computer-implemented method of claim 39, further comprising calculating and providing in the illustration periodic payments provided under the policy based on certification of a medical condition of the insured, the periodic payments based on certification of the medical condition reducing the death benefit amount.