Method and system for an annuity with periodic interest rate adjustments
AssigneeHartford Fire Insurance Company
InventorSimpa Baiye
Life of this patent
Estimating the term…
Abstract
A data processing method administers an annuity product for an annuitant. The annuity product has a guaranteed minimum interest rate. Administration is such that the annuity product provides periodic interest rate adjustments. The adjustments are a function of changes in the prevailing market interest rates, based on reliable economic metrics such as the Consumer Price Index and short and long term Treasury rates.
Claims25
A data processing system for administering an annuity product, the annuity product having a base contract value, and a guaranteed minimum interest rate, said system comprising:
- a storage device having data relating to the annuity product, the base contract value, the guaranteed minimum interest rate, a long term treasury interest rate, and a short term treasury interest rate;
- and
- a processor operatively coupled to the storage device said processor configured to read said data relating to the annuity product, the base contract value, the guaranteed minimum interest rate, the long term treasury interest rate, and the short term treasury interest rate, the storage device storing modules utilized by the processor for calculating a base contract value at the issue of the annuity product, for calculating the guaranteed minimum interest rate, and for calculating the difference between the long term treasury interest rate and the short term treasury interest rate at the issue of the annuity product and setting this value as the first year's spread percentage.
A data processing system for administering an annuity product, the annuity product having a base contract value, and a guaranteed minimum interest rate, said system comprising:
- a storage device having data relating to the annuity product, the base contract value, the guaranteed minimum interest rate, and a consumer price index;
- and
- a processor operatively coupled to the storage device said processor configured to read said data relating to the annuity product, the base contract value, the guaranteed minimum interest rate, and the consumer price index, the storage device storing modules utilized by the processor for calculating a base contract value at the issue of the annuity product, for calculating a guaranteed minimum interest rate, and for calculating the consumer price index at the issue of the annuity product and setting the consumer price index value as the base consumer price index.
A computer implemented data processing method for administering an annuity product for an annuitant, the annuity product having a contract value, and a guaranteed minimum interest rate, said method comprising the steps of:
- i. calculating a base contract value at the issue of the annuity product;
- ii. calculating a guaranteed minimum interest rate and setting it as the first year's interest rate;
- iii. calculating the difference between a long term treasury interest rate and a short term treasury interest rate at the issue of the annuity product and setting this value as the first year's spread percentage;
- iv. calculating a spread participation rate within the range of 0% and 100%;
- v. periodically paying a guaranteed interest payment to the present contract value, wherein the guaranteed interest payment is calculated using the following formula:
- ((present contract value)×(interest rate));
- and
- wherein the interest rate is calculated using the following formula:
- [(previous year's interest rate)+(spread participation rate)×greater of:
- a. ((difference between the present long term treasury interest rate and the present short term treasury interest rate) minus (previous year's spread percentage));
- or
- b. Zero.
A computer implemented data processing method for administering an annuity product for an annuitant, the annuity product having a contract value, and a guaranteed minimum interest rate, said method comprising the steps of:
- i. calculating a base contract value at the issue of the annuity product;
- ii. calculating a guaranteed minimum interest rate;
- iii. calculating the consumer price index at the issue of the annuity product and setting this value as the base consumer price index;
- iv. calculating a bonus participation rate within the range of 0% of 100%;
- v. periodically paying a guaranteed interest payment to the present contract value, wherein the guaranteed interest payment is calculated using the following formula:
- (present contract value)×(guaranteed minimum interest rate);
- and
- vi. periodically paying an inflation bonus to the present contract value;
- and
- wherein the inflation bonus is calculated based on the difference between the base consumer price index and the present consumer price index.
Dependencies are inferred from the claim text.