US 2008/0167904 A1 · Premium financed life insurance products and methods

Abstract

Premium financed insurance products and methods which can eliminate the requirement for excess collateral beyond the policy itself are disclosed, wherein the premiums for an insurance policy covering the life of an insured are paid by a loan, and wherein the loan agreement, the policy and/or related documents include a provision or are accompanied by an agreement for pooling of the death benefit of the policy with the death benefit amounts derived from other premium financed policies in the pool, wherein in the event of a cancellation event the loan for the cancelled policy is repaid with interest on a pro-rata basis from and out of the death benefits of other policies in the pool. In an embodiment, a second policy or rider to the first policy is subject to pooling, wherein the second policy offsets the risks associated with the lack of excess collateral previously required. A cancellation event may be caused by, among other things, a suicide or false statement, fraud or material concealment in obtaining the policy, a failure of an insurer or an increase in premium payment rates. In an embodiment, a right of first refusal to purchase the policy or the policy benefits from the insured may be granted to the lender. Also disclosed is a computer system for implementing the products and methods.

Claims20

Dependent claims

A premium financed life insurance product, comprising an insurance policy covering the life of an insured wherein the premiums are paid by a loan from at least one third party that creates a debt, wherein the loan agreement or policy includes a provision or is accompanied by a collateral agreement for pooling of a portion of the death benefit of said policy with portions of the death benefits of other premium financed life insurance policies in the same pooling group, wherein the payment of at least a portion of said debt is secured by portions of the death benefits of other policies in the pool in the event of a cancellation event.

A method of providing a premium-financed life insurance product which method comprises of:

(a) obtaining a person's assent to be insured under a life insurance policy of death benefit value X, requiring over the life of the insured person periodic life insurance premium payments as consideration for the maintenance of the policy until the time of the insured person's death;
(b) settling a trust comprising the steps of:
(i) declaring the death benefit value X an asset of the trust;
(ii) naming a trustee and (iii) naming one or more beneficiaries of the trust;
(c) obtaining the proposed insured person's assent to a premium financing agreement wherein the premium payments of the policy are paid by a third party lender in exchange for repayment to the lender after death of the insured, from trust assets (including the life insurance proceeds) of (i) paid premium payments, (ii) repayment of part or all of the agreed interest on the value of the paid premium payment amounts at an interest rate of I2;
(d) obtaining the person's assent to be insured under a second whole life insurance policy of death benefit value Y, requiring over the life of the insured person periodic life insurance other premium payments as consideration for the maintenance of the second policy until the time of the insured person's death;
(e) declaring the death benefit value Y (i) an asset of the trust, (ii) and payable to the lender as a trust creditor at the time of the insured person's death;
(f) obtaining the insured person's assent to a second premium financing agreement wherein the premium payments of the second policy are paid by the lender in exchange for repayment to the lender after death of the insured person, from trust assets (including the life insurance proceeds), an amount necessary to repay items (c)(i)-(c)(iii);
(g) obtaining the trust's contractual agreement upon settlement of the trust to pool pursuant to a pooling agreement the death benefit from one or more life insurance policies acquired by means of premium financing the death benefits with the death benefits of other members of the pool.

6 more elements

Dependencies are inferred from the claim text.

Premium financed life insurance products and methods

Life of this patent

Premium financed life insurance products and methods

Life of this patent

Abstract

Claims20