System for monitoring increasing income financial products
The investment account structure provides increasing income financial products wherein each subscriber invests in a financial contractual product/program and designates beneficiaries. The beneficiary is assigned, along with other who are demographically similar, to a contract group. The financial product contract is funded with principal payments or premiums paid by subscribers. Income is provided by contractual terms to surviving beneficiaries of the same assigned contract group on an increasing, survivorship basis until (a) all the initial primary beneficiaries die; or (b) the contract expires based upon the expiration of preestablished time periods. Upon expiration, secondary beneficiaries receive pro rata shares.
This is a divisional patent application based upon and claiming the priority of patent application Ser. No. 09/553,666 filed Apr. 20, 2000, now pending, which is a continuation of U.S. patent application Ser. No. 09/327,728, filed Jun. 8, 1999, now U.S. Pat. No. 6,061,661.
BACKGROUND OF THE INVENTIONThe present invention relates to a method for electronically processing transactional data and monitoring funds invested in an increasing income financial product.
U.S. Pat. No. 5,864,685 to Hagan discloses an increasing income trust computer transaction system and an insured investment account system. This patent disclosure relates to a certain financial product wherein a subscriber purchases an annuity contract or an irrevocable trust and identifies a primary beneficiary for that contract or trust. The primary beneficiary may be the subscriber or may be another party. Primary beneficiaries having actuarially similar characteristics are grouped together. “The trust corpus is funded with the annuity contract principal and/or the annuity contract income of subscribers. Each of the primary beneficiaries (typically the subscribers themselves, but possibly other individuals) receives payments from the trust income. As each subscriber dies, the trust income is distributed to the remaining primary beneficiaries. When the last subscriber dies, the trust corpus is distributed proportionally to secondary beneficiaries, typically the heirs of the primary beneficiaries.” Col. 3, lines 51-60. Accordingly, the system described in Hagan '685 utilizes a data processing method which involves determining when the subscriber dies, computing increasing income trust fund payments to surviving subscribers who are grouped together in the same actuarial group as the decedent, and distributing the corpus of the trust, on a prorata basis, to all secondary beneficiaries upon the death of all subscribers in the actuarial group.
U.S. Pat. No. 5,631,828 to Hagan discloses a method and a system for processing federally insured annuity and life insurance investments. U.S. Pat. No. 5,291,398 to Hagan discloses a method and a system for processing federally insured annuity and life insurance investments. U.S. Pat. No. 4,752,877 to Roberts et al.; U.S. Pat. No. 4,642,768 to Roberts and U.S. Pat. No. 4,722,055 to Roberts disclose computer systems which monitor financial products. These products fund future events or expenditures. For example, if a person wanted to find the college education of his or her child, the Roberts system provides a financial product which is monitored and maintained by a computer which collects premium from subscribers, projects the future cost of a college education and invests the premium payments and requests additional premium payments in order to achieve the subscriber's goal, to wit, to pay for the college. Roberts' system also discloses the funding of retirement and nursing home expenditures.
None of the aforementioned prior art patents disclose certain important data processing features which establish the viability, growth and continued maintenance of an increasing income financial product.
SUMMARYThe present invention responds to administrative problems associated with an increasing income financial product and addresses deficiencies in the prior art. The data processing system and method according to a preferred embodiment of the present invention implements an investment account structure establishing and providing an increasing income financial product.
According to a preferred embodiment of the invention, each subscriber invests in a financial contractual product or program. Each subscriber designates primary and secondary beneficiaries. The primary beneficiary is assigned, along with a number of demographically similar beneficiaries, to a certain contract group. The financial product contract is funded with principal payments or premiums paid by subscribers. Income is provided according to the contractual terms or parameters to surviving primary beneficiaries of the same assigned contract group on an increasing, survivorship basis until (a) all the initial primary beneficiaries die; or (b) the contract expires based upon the expiration of pre-established time periods. When the contract expires, the designated secondary beneficiaries receive their pro rata share of the principal from the contract group.
OBJECTS OF THE INVENTIONThus, it is an object of the present invention to provide a data processing system and method for implementing and administering an investment account structure consisting of increasing income contracts whose commingled principal is invested in any legal investment.
It is a further object of the present invention to provide a data processing system and method for implementing an investment account structure consisting of contracts that pay out increasing income to the survivors and whose principal is subsequently distributed to the heirs upon expiration of the contract.
Another object is that the implementation provides minimum overhead charges and maximum security so that beneficiaries are fully informed regarding the increasing income feature. Therefore, the system provides periodic reports to subscribers or beneficiaries, advising them of their relative progress towards their goals. It also provides reports for system administration and auditing.
Yet other objects of the invention, its nature, and various advantages will be apparent from the accompanying drawings and the following detailed description of the preferred embodiments of the invention.
BRIEF DESCRIPTION OF THE DRAWINGS
The data processing system and method according the present invention is depicted as part of the schematic diagram of
Data and instructions that implement the process and method are stored in disk storage 103. The data are preferably maintained in entity records that include descriptive data as shown in Table 1. The data can be organized as files, relational databases, or other equivalent structures.
The instructions are processed by CPU 102 and are broken into cooperating modules. A preferred functional decomposition is listed in Table 2. The instructions can be written in procedural, database, object oriented, or other equivalent computer OS language.
Alternative, equivalent organizations of data and instructions will be apparent to those skilled in this art.
The other elements of
The invention obtains data describing the investments in banks 108 and brokerage houses 114, 116 via communications link 109. Preferably, 109 is an automatic, telecommunications link. Alternatively, it could also require manual steps.
The system utilizes associated data processing subsystems that are known in the prior art. Contract management and payment system 110 is a subsystem for managing financial product contracts, receiving premium investments, making increasing income and principal payments, and tracking principal value. Portfolio and accounting system 111 is a subsystem for managing the investments, increasing income, and cash on hand. These subsystems may be implemented on computer 100. Alternatively, they may reside on a separate computer system communicating via communications link 112 with computer 100. In either implementation, contract system 110 receives from computer 100 data describing financial product contracts and sends to computer 100 data describing payment history and principal value of the contracts. Portfolio and accounting system 111 receives, from computer 100, data describing orders to buy or sell particular investments and sends, to computer 100, data describing income history and principal value of outstanding contracts and investments.
The following Abbreviations Table lists some abbreviations that are used herein.
Abbreviations Table
JTROS Joint tenant with right of survivorship
ROI return on investment
i income or increasing income
P principal
Sub'r/inv'tr subscriber—investor (may be any person or entity considered a primary beneficiary)
K contract—any legal contractual system in Financial Products Table
demos. demographics (a defined statistical grouping of human population, especially concerning vital statistics)
Prime Ben. primary beneficiaries
incr. increment, incremental, increase or increasing
2d Ben. secondary beneficiaries
min'm minimum
max maximum
mgt. management, typically referring to management fee for operating system or managing money
exp. expired
econ. economic
invest. investments
pmt. payment
para. parameters
An important feature of the present invention is to group primary beneficiaries (which may be subscribers purchasing the financial product) together into similar demographic groups and utilize a single financial product contract for that group such that (a) the financial product generates increasing income for the primary beneficiaries (in accordance with the contract terms); (b) the increasing income is based upon a “survival theory” that is, primary beneficiaries that live the longest get increasing income from the pooled principal of the entire contract group because other beneficiaries in the contract group die and the income is divided among fewer and fewer beneficiaries; and, (c) when the contract expires per its terms (pre-established parameters), the principal is distributed to the heirs or the secondary beneficiaries. There are several variations of the financial product that are explained herein. These variations and the associated data processing method establish a viable and financially sound product for investors.
Several types of financial-contractual structures can be implemented to provide the increasing income product discussed herein.
The terms “subscriber” and “investor” generally refer to the individual or entity funding or paying the premiums for the increasing income financial product. However, the subscriber may or may not designate himself or herself as a primary beneficiary to receive the increasing income. The terms “subscriber” and “primary beneficiary” are sometimes used interchangeably herein. The contract is based upon a grouping of “primary beneficiaries” as described hereinafter. Typically, the subscriber is the person or one of the people who receives the increasing income. The following table lists different types of primary beneficiaries.
It is important to note that reference to “a primary beneficiary” may be construed to cover two individuals, i.e. a husband and wife, even though a singular term “primary beneficiary” is used herein. If the primary beneficiary covers two people, the “primary beneficiary” does not die until the last of the pair dies.
Also, it should also be noted that a closed end mutual fund is designated as a “contract” herein. The contract defines obligations and rights of (a) the financial product administrator; (b) the subscriber; and (c) the primary and secondary beneficiaries. It is believed that mutual funds have sufficient legal contraints contained therein and may be broadly classified herein as “contractual” in nature. Hence, the mutual fund is a “contract” as it relates to the increasing income financial product described herein.
After one or more input transactions have been gathered as indicated at block 106, the system starts processing at block 211 and continues to storage maintenance process 201, where data is input to disk storage 103. After one or more transactions have been input at block 201, the succeeding processes, at blocks 202 to 208, are performed in the order illustrated. The system stops at block 212. Preferably, these processes would be performed at an appropriate interval, at least monthly but perhaps weekly or daily, depending on the frequency of transaction input, premium and income payments, and other system events. External data representing investments (prospective and existing) is input at function block 216. In a like manner, general economic data or forecast is input at block 218. This economic data includes, but is not limited to (a) consumer and manufacturer's price indices, (b) inflation, (c) interest rate, (d) stock and commodity indices and (e) other economic data generally relied upon to base investment.
A detailed description of the storage maintenance means is depicted in
Now referring to
Characteristics of Contract Group
Age (e.g., year of birth (single year bracket), multiple age brackets (e.g., 2 year age brackets, 5 year age brackets or multi-year grouping))
Sex married—unmarried—divorced or separated
Race (if legally considered non-discriminatory)
Ethnic Background (if legally considered non-discriminatory)
Residence (city, state, region and/or country)
Health (potentially requiring a health certificate executed by a professional)
Smoker/non-smoker
During the development ofthe increasing income financial product, it was noted that there may be times when the financial product administrator would accept funds from a subscriber (associated with a designated primary beneficiary) but the administrator did not currently have an “open” increasing income contract for that primary beneficiary. In other words on a simplistic basis, the increasing income financial product does not operate properly until a reasonably large number of primary beneficiaries (supported by funds from subscribers) are gathered together in a singular contract group. Accordingly, contract inception parameters are necessary to assure the viability or financial health of the increasing income financial product. For example, the administrator may determine, based upon a subscription unit value of $10,000.00 (minimum premium) that at least 100, but not more than 500 primary beneficiaries must be assigned to a particular contract group represented by a respective contract. Accordingly, the inception parameter for that contract would be either 100 primary beneficiaries or $1,000,000.00. The $1,000,000.00 financial pool minimum is based upon a minimum investment criteria established with the advice of investment administrators 118. The term “inception” as used herein refers to the beginning of an obligation, on the part of the administrator, to pay increasing income based upon contractually established events or parameters to primary beneficiaries in a certain contract group. In other words, the “inception” refers to the period wherein the primary beneficiaries could, under some possibility, receive increasing income. If the increasing income is delayed for a predetermined number of years or during a “quiet time” when no primary beneficiary receives any “increasing” income, the “inception date” for the respective contract and contract group begins at the beginning of the quiet period.
In a similar manner, the administrator does have financial obligations to subscribers who have provided funds to purchase the increasing income product prior to the inception of the increasing income period pursuant to the contract. Of course, if the contract does not become “effective” until 100 primary beneficiaries are identified and funded by subscribers, the administrator must refund or return earlier subscriber's funds in the event the respective contract does not enter into its “inception phase” due to an insufficient number of subscribers/primary beneficiaries for that designated contract group. A time period may be associated with this “refund period” prior to inception of the contract. These contracts are called herein “inchoate contracts.”
In the event the administrator accepts funds from a subscriber and the system does not have an “open” contract, the funds are placed in escrow, information regarding the funds and potential new increasing income contracts are placed in storage area 316 until the minimum number of subscribers/primary beneficiaries is obtained for that increasing income contract. At that point in time, the inception period for the increasing income contract begins, the contract is “open” and the previously identified and sequestered funds are thereafter released for investment purposes by the administrator. In an advanced system, the sequestered funds may be conservatively invested. When the contract is “open,” beneficiaries' rights are no longer inchoate.
In a popular demographic group, the new subscriber/primary beneficiary may cause an unacceptably large number of beneficiaries for a particular contract group. In other words, if adding the proposed beneficiary to the existing contract group (n+1) exceeds a predetermined maximum number of beneficiaries or a predetermined total dollar amount for that contract (for example, $10,000,000.00), the contract is “closed” and the proposed primary beneficiary/subscriber must be designated for another increasing income contract. These contractual conditions are called “closure parameters” herein. This may result in activating the inception parameter conditions prior to opening a second increasing income contract for that proposed beneficiary. Closure parameters include (a) a maximum number of primary beneficiaries in a contract group and/or (b) a total monetary limit associated with the particular increasing income contract for a respective contract group. Other contract closure parameters may be specified in the increasing income contract such as external economic consideration (interest rate exceeding a predetermined annual amount) or, civil disruption or commotion, war, or other factors identifiable in the increasing income contract. The New Contract Inquiry Parameter Table set forth below identifies some critical concepts.
New Contract Inquiry Parameters
no match beneficiary age with existing contract or contract group having similar age parameters
n+1 is less than minimum beneficiaries for a contract group
n+1 exceeds maximum beneficiaries for selected contract
new beneficiary does not match other contract group characteristics for any open contracts (sex, age, race, health (good or predetermined health condition (e.g. terminally ill with a certain disease))
It should be noted that the increasing income financial product may be sold not only to healthy individuals (beneficiaries) but also individuals who are subject to certain diseases, especially terminal diseases. For example, based upon the demographics and survival characteristics of persons with Acquired Immune Disease Syndrome (AIDS), the increasing income financial product may be particularly attractive. A key concept in the viability of the financial product is the theory that the beneficiary, designated by the subscriber, will survive a longer period that other similarly situated beneficiaries. Particularly, healthy individuals will make more money from the increasing income product as compared with less healthy individuals. However, since health is a relative concept, terminally ill patients such as AIDS patients, may readily participate under the theory that if they do survive a long period of time, they will be financially rewarded. This may provide an incentive to comply with aggressive medical treatment. In such a situation, a physician's certificate certifying that the primary beneficiary has a certain health condition would be appropriate. Further, the demographic input in block 346 is meant to encompass changing survival rate data and factors from the general populace which may affect the inception or closure of a particular contract group for an increasing income financial product. The administrator may be contractually permitted to “close” the contract group based upon demographic or survival rate data without resort to fixed a number of participants or time factors.
The New Contract Inquiry Parameter Table set forth above identifies some major concepts regarding whether or not a new increasing income contract is necessary based upon a proposed primary beneficiary designated by a paying subscriber.
Process at block 317 assigns the new subscriber to a contract, that consists of up to approximately 200 other subscribers/beneficiaries with similar demographic or actuarial characteristics and equal investments. Other participation limits may be established. This grouping of beneficiaries may be done by consulting mortality tables indexed by the chosen actuarial characteristics and picking only subscribers/beneficiaries with expected time until death in a fixed narrow range. For example, a given financial product contract may contain only subscribers with expected time to death of 30 years to 30 years and six months and investments of $500,000. Another contract group may have minimum investment units of $10,000.00 but the inception criteria may be set at 500 subscribers or beneficiaries.
At block 319, the system checks for a transaction indicating the death of a beneficiary or expiration of the contract. If not, subscriber transaction processing is complete. See return 3R to
The system performs a further test at block 322 by fetching all the subscriber/beneficiary storage areas assigned to the contract updated at blocks 320 and 321 and checks to determine if the designated beneficiaries have all died or if the contract has expired by its terms. If not, processing is complete, and the system returns, as indicated at label 3R, to continue as indicated in
Turning now to
By providing a variety of increasing income products for the same beneficiary contract group (e.g. males 50-52 years old), the administrator can provide an “aggressive” product (i.e., invasion of subscriber's principal, no upper limit on increasing income) and offer to the same subscriber/beneficiary a “conservative” product (i.e., no invasion of principal, income based exclusively on survivorship). Other combinations are possible as outlined above in the contract matrix table.
The following Premium Payment Table provides options for funding the financial product.
If an investment transaction has been detected, processing continues in
A detailed description of the premium computation system and methodology is depicted in
The investment performance system is depicted in
At block 505, the system obtains from external sources relevant economic forecasts, particularly inflation, interest rate, GDP and economic growth forecasts for future years. Additionally, the system obtains return or investment or ROI data in function block 505.
Data input at block 505 and the test at block 509 implement a loop to extract all portfolio and accounting investment data accumulated for this period (daily, weekly, monthly, etc.) from portfolio and accounting system 111. At blocks 506, 507, and 508, the system determines whether the payment of investment income is received, ROI exceeds the contract parameters, or principal is received (a) from a subscriber due to the purchase of the increasing income financial product; or (b) sale of an investment, respectively. For income received, as indicated at block 510, the system updates the income payment history for the particular investment in the storage area for the particular contract involved. Then, at block 511, the system accumulates the total income received by the benefit structure in this period by summing the income for all contracts. This information updates the system record, which contains data similar to Table 1, row 6.
For prospective economic and ROI analysis, the investment storage area is updated to reflect a possible “ROI watch” at block 513 to reflect the potentially new problem to meet the contractual commitments for increasing income.
Returning to
Turning now to
Payment tracking and demographic versus ROI and increasing income commitment processing system continues as depicted in
Beginning with a storage area fetch at block 525, the system proceeds through block 531 to implement a scan of all investment storage areas stored in disk storage 103. For each investment area, process steps at blocks 526 to 530 are performed to determine the current ROI for each new investment in each contract group, the economic forecast relevant to the new investment and the increasing income commitment for that contract group. This process and subsystem establishes the stability of the benefit structure. This feature is carried out by fetching all ROI and relevant economic forecast data (if this forecast is included as part of the system) for each contract group as indicated at block 526. If an ROI of an investment does not exceed a target income level for a certain contract group (whether the income is guaranteed or simply estimated by the financial product administrator), a sell order is generated 527, a new investment is identified with an appropriate ROI and a buy order is generated. If contract funds are reinvested, at block 527, its storage area is deleted at block 528. The total of all individual investment portfolios from all the contract updates in the investment record are updated at block 529. The investment totals are then summed to compute the total system increasing income and principal values at block 530. This information updates the system record.
Finally the income generated funds from the investment are computed at block 532. This information also updates the system record.
It should be noted that the contract, during the inception period, may have a “no-payment” period or a “constant level income” period. With a no-payment for a certain term of years contract, the income generated by the principal associated with a particular contract group accumulates during the quiet or “no payment” term thereby increasing the overall value to the contract group as well as to the beneficiaries. For example, an increasing income financial product purchased by a 30 year old may not pay any income for a period of 25 years, that is, until the subscriber/beneficiary reaches 55. All beneficiaries are 30 years old at inception. At this 55 year old age, the subscriber/beneficiary may be interested in retirement. During the 25 years, accumulated income greatly increases the total value of the financial product for the beneficiary. In contrast, a 50 year old purchasing the increasing income product may wish a “constant level” income stream from his or her investment for a period of 15 years. Thereafter, the investor/beneficiary may want an increasing income financial benefit from the financial product. In the case of a 30 year old when he or she reaches 55, the subscriber/beneficiary may want to activate the increasing income feature. Some of these concepts are set forth below in the First Tier Income Payment Plan Table.
Upon the death of a primary beneficiary, the increasing income financial product may further include a contract parameter which provides some (a) benefit to the secondary beneficiary or beneficiaries (herein, reference will be made to a beneficiary however such reference also refers a plurality of beneficiaries); or (b) the ability of the secondary beneficiary to redeem the remaining value of the principal at an earlier time than the formal expiration of the contract. In the event of early redemption, the returned principal is greatly discounted. As described earlier, the contract may expire at (a) the death of all primary beneficiaries in a contract group, (b) a predetermined or preset time from inception ofthe contract; (c) a predetermined time from closure of the contract; (d) or any other contractually identified event. In the event the secondary beneficiary wishes to withdraw principal established by the initial subscriber prior to contract expiration, the following Second Tier or Intermediate Payment Plan Table provides some option.
At the expiration of the contract, the secondary beneficiary may be presented with several options regarding utilization of the principal. Some of these options are set forth in the Tertiary or Third Tier Payment Plan Table set forth below.
The secondary payment plans and tertiary payment plans may be implemented and offered as part of the computerized system to maintain the increasing income financial product at steps 319 through 323 in
If an inchoate contract match is found, the system executes test 674 which determines whether the inchoate contract group exceeds the contract inception parameters. As stated earlier, these contract inception parameters may include minimum numbers of subscribers/beneficiaries, minimum total investment for a contract group, or other identifiable contractual parameters. If so, the system in test 674 executes the contract system premium function block 110. The same result is obtained from test 656 wherein a match is found between the primary beneficiary and any open increasing income contracts. Referring briefly to test 674, if the minimum inception parameters in a contract are not met, the system updates the relevant records in function block 670. The contract system function block 110 particularly identifies the premium payments as specified earlier in connection with
Step 705 determines whether the current investment meet the income target values on the basis of each contract group as well as on the basis of the entire financial product system. If not, test 706 generates sell orders and activates the portfolio accounting system function block 111. If YES, the system tests in step 708 whether there are any additional investment items to be reviewed. The system exits in step 709.
A detailed description of the reporting means is depicted in
This claims appended hereto are meant to cover modifications and changes within the scope and spirit of the present invention.
Claims
1. A method of monitoring and maintaining a financial product, purchased by a plurality of subscribers, paying increasing income to a plurality of primary beneficiaries based upon their comparable survival in a predetermined group including the steps of:
- obtaining subscriber payments for funding said increasing income financial product,
- establishing a plurality of contracts for a corresponding plurality of primary beneficiaries, each primary beneficiary of said plurality of primary beneficiaries designating a corresponding secondary beneficiary;
- segregating said plurality of primary beneficiaries into a plurality of contract groups, each contract group utilizing one contract of said plurality of contracts, wherein each primary beneficiary of a respective contract group has (i) substantially similar demographics as compared with others in the same contract group, and (ii) a substantially similar contract compared with others in the same contract group;
- assuring compliance with contractual parameters which parameters define unique attributes of a respective contract of said plurality of contracts, said contractual parameters including: (i) a beginning of an increasing income payment period, (ii) an expiration parameter representing an ending of said increasing income payment period, (iii) the presence or absence of an income target value, and, (iv) the presence or absence of an invasion of principal parameter; directing the investment of funds created by said subscriber payments for said plurality of contracts;
- directing and reporting the payment of increasing income to primary beneficiaries surviving others in said respective contract group of said plurality of contract groups; and,
- directing and reporting the payment of principal to said secondary beneficiaries upon the occurrence of said expiration parameter for said respective contract group.
2. A method as claimed in claim 1 wherein the step of assuring compliance with the contractual parameter of said income target value utilizes factors relative to income generation from a predetermined investment, prospective and realized capital gain, and an investment time factor associated with said predetermined investment.
3. A method as claimed in claim 1 including the step of assuring compliance with a closure contractual parameter, said closure contractual parameter including one from the group of a maximum number of primary beneficiaries in said contract group, a total monetary limit associated with said respective contract for said respective contract group, and a predetermined time period.
4. A method as claimed in claim 1 wherein said contractual parameter relative to said beginning of an increasing income payment period is an inception parameter, said inception parameter is at least one parameter from the group including a minimum number of primary beneficiaries in said contract group, a minimum monetary limit associated with said respective contract for said respective contract group, a predetermined time from acceptance of payment from a subscriber on behalf of a primary beneficiary, and a contractually identified event.
5. A method as claimed in claim 4 including the step of refunding and reporting all payments made by a respective subscriber on behalf of a corresponding primary beneficiary upon determining, via said assuring compliance step, that the corresponding contract for said respective subscriber either (i) does not meet or (ii) exceeds the inception parameter associated with said corresponding contract.
6. A method as claimed in claim 1 including the steps of determining a return on investment; projecting said return on investment over a predetermined future time period and determining whether said return on investment and the projected return on investment is less than a predetermined value.
7. A method as claimed in claim 6 wherein said respective contract includes the presence of said income target value.
8. A method as claimed in claim 4 wherein, in said step of assuring compliance, said inception parameter correlates to a beginning of an accumulation of income time period which will, at some time in the future, support increasing income payments to surviving primary beneficiaries in a respective contract group.
9. A method as claimed in claim 8 wherein said step of assuring compliance includes assuring compliance with a contractual closure parameter, said closure parameter including one from the group of a maximum number of primary beneficiaries in said contract group, a total monetary limit associated with said respective contract for said respective contract group, and a predetermined time period, said closure parameter relating to a predetermined closure event which, as a result thereof, said administrator is contractually prohibited from placing additional primary beneficiaries into said respective contract group.
10. A method as claimed in claim 9 wherein, in said step of assuring compliance, said expiration parameter relates to said end of said accumulation of income time period and payment of increasing income payments to surviving primary beneficiaries in a respective contract group, and an occurrence of said expiration parameter event triggering said step of directing and reporting the payment of principal.
11. A method as claimed in claim 10 wherein, in said step of assuring compliance, said income target value utilizes factors including income generation from a predetermined investment, prospective and realized capital gain, and an investment time factor associated with said predetermined investment.
12. A method as claimed in claim 11 wherein, in said step of assuring compliance, said invasion of principal parameter relates to said administrator utilizing said subscriber payments to pay increasing income to primary beneficiaries surviving others in said respective contract group.
13. A method as claimed in claim 12 including the steps of computing a return on investment; projecting said return on investment over a predetermined future time period and determining whether said return on investment and the projected return on investment is less than a predetermined value.
14. A method as claimed in claim 1 including the step of investing said funds created by said subscriber payments in accordance with said contractual parameters, said step of investing said funds is executed substantially independently with respect to the steps of establishing a plurality of contracts, obtaining subscriber payments and directing payment of said increasing income.
15. A method as claimed in claim 1 wherein said expiration parameter includes the step of determining at least one from the group of (i) whether all primary beneficiaries have died; (ii) a predetermined time has past since said beginning of said increasing income payment period; (iii) the occurrence of a predetermined contractual event.
16. A method as claimed in claim 1 wherein said step assuring compliance with said contractual parameter of the presence or absence of said income target value includes monitoring factors relative to at least two from the group of income generation from a predetermined investment, realized capital gain, unrealized capital gain, prospective capital gain, and a time factor associated with said predetermined investment.
17. A method for establishing a financial product, purchased by a plurality of subscribers, paying increasing income to a plurality of primary beneficiaries based upon their comparable survival, the method comprising:
- segregating said plurality of primary beneficiaries into a plurality of groups having similar actuarial characteristics;
- assuring compliance with contractual parameters for each group, said contractual parameters including: (i) a beginning of an increasing income payment period, (ii) an expiration of said increasing income payment period, (iii) the presence or absence of an income target value, and, (iv) the presence or absence of an invasion of principal parameter;
- monitoring the investment of funds created by said subscriber payments on behalf of said primary beneficiaries in compliance with said contractual parameters; and
- directing the payment of increasing income to primary beneficiaries surviving others in the respective group.
18. A method as claimed in claim 17 wherein each primary beneficiary designates a corresponding secondary beneficiary and the method includes directing the payment of principal to said secondary beneficiaries upon the occurrence of said expiration parameter for said respective group and wherein the steps of processing transactions and subscriber payments, and directing increasing income payments and principal payments are executed substantially independently from the step of monitoring the investment of finds.
19. A method as claimed in claim 18 including the step of establishing a telecommunications link to coordinate and exchange data relative to said processing transactions and said monitoring the investment of funds.
20. A method of establishing a financial product, purchased by a plurality of subscribers making payments for funding said increasing income financial product, paying increasing income to a plurality of primary beneficiaries based upon their comparable survival, the method comprising:
- segregating said plurality of primary beneficiaries into a plurality of groups having similar actuarial characteristics;
- assuring compliance with contractual parameters for each group, said contractual parameters including: (i) a beginning of an increasing income payment period, (ii) an expiration of said increasing income payment period, (iii) the presence or absence of an income target value, and, (iv) the presence or absence of an invasion of principal parameter;
- directing the investment of funds created by said subscriber payments on behalf of said primary beneficiaries in compliance with said contractual parameters; and
- directing the payment of increasing income to primary beneficiaries surviving others in the respective group.
21. A method as claimed in claim 20 wherein each primary beneficiary designates a corresponding secondary beneficiary and the method includes directing the payment of principal to said secondary beneficiaries upon the occurrence of said expiration parameter for said respective group and wherein the step of assuring compliance with the contractual parameter of said income target value utilizes factors relative to income generation from a predetermined investment, prospective and realized capital gain, and an investment time factor associated with said predetermined investment.
22. A method as claimed in claim 20 including the step of assuring compliance with a closure contractual parameter, said closure contractual parameter including one from the group of a maximum number of primary beneficiaries in the respective group, a total monetary limit associated with said respective group, and a predetermined time period.
23. A method as claimed in claim 20 wherein said contractual parameter relative to said beginning of an increasing income payment period is an inception parameter, said inception parameter is at least one parameter from the group including a minimum number of primary beneficiaries in said respective group, a minimum monetary limit associated with said respective group, a predetermined time from acceptance of payment from a subscriber on behalf of a primary beneficiary, and a contractually identified event.
24. A method as claimed in claim 23 including the step of directing the refunding of all payments made by a respective subscriber on behalf of a corresponding primary beneficiary upon determining, via said assuring compliance step, that the respective subscriber's payments either (i) do not meet or (ii) the inception parameter associated with the contractual parameters for said respective group.
25. A method as claimed in claim 20 including the steps of determining a return on investment; projecting said return on investment over a predetermined future time period and determining whether said return on investment and the projected return on investment is less than a predetermined value.
26. A method as claimed in claim 25 wherein the contractual parameters for said respective group include the presence of said income target value.
27. A method as claimed in claim 23 wherein, in said step of assuring compliance, said inception parameter correlates to a beginning of an accumulation of income time period which will, at some time in the future, support increasing income payments to surviving primary beneficiaries in said respective group.
28. A method as claimed in claim 27 wherein said step of assuring compliance includes assuring compliance with a contractual closure parameter, said closure parameter including one from the group of a maximum number of primary beneficiaries in said respective group, a total monetary limit associated with said respective group, and a predetermined time period, said closure parameter relating to a predetermined closure event which, as a result thereof, additional primary beneficiaries cannot be added to said respective group.
29. A method as claimed in claim 28 wherein, in said step of assuring compliance, said expiration parameter relates to said end of said accumulation of income time period and payment of increasing income payments to surviving primary beneficiaries in a respective group, and an occurrence of said expiration parameter event triggering said step of directing the payment of principal.
30. A method as claimed in claim 29 wherein, in said step of assuring compliance, said income target value utilizes factors including income generation from a predetermined investment, prospective and realized capital gain, and an investment time factor associated with said predetermined investment.
31. A method as claimed in claim 30 wherein, in said step of assuring compliance, said invasion of principal parameter relates to utilizing said subscriber payments to pay increasing income to primary beneficiaries surviving others in said respective group.
32. A method as claimed in claim 31 including the steps of computing a return on investment; projecting said return on investment over a predetermined future time period and determining whether said return on investment and the projected return on investment is less than a predetermined value.
33. A method as claimed in claim 20 including the step of directing the investment of said funds created by said subscriber payments in accordance with said contractual parameters, said step of directing investment is executed substantially independently with respect to the steps of obtaining said subscriber payments and directing payment of said increasing income.
34. A method as claimed in claim 20 wherein said expiration parameter includes the step of determining at least one from the group of (i) whether all primary beneficiaries have died; (ii) a predetermined time has past since said beginning of said increasing income payment period; (iii) the occurrence of a predetermined contractual event.
35. A method as claimed in claim 20 wherein said step assuring compliance with said contractual parameter of the presence or absence of said income target value includes monitoring factors relative to at least two from the group of income generation from a predetermined investment, realized capital gain, unrealized capital gain, prospective capital gain, and a time factor associated with said predetermined investment.
36. A method as in claim 20 wherein said comparable survival is determined by reference to a mortality table.
37. A method as in claim 20 wherein said financial product is a private pension plan.
38. A method as in claim 20 wherein said directing the investment of funds further comprises maintaining at least a pre-set return on investment for said investment of funds.
39. A computerized method for monitoring and maintaining a financial product, purchased by a plurality of subscribers, paying increasing income to a plurality of primary beneficiaries based upon their comparable survival in a predetermined group including the steps of:
- providing a computer system for processing transactions, including subscriber payments, investment tracking and increasing income payments, and for reporting the status of beneficiary accounts;
- monitoring, via said computer system, the establishment of a plurality of contracts for a corresponding plurality of primary beneficiaries, each primary beneficiary of said plurality of primary beneficiaries designating a corresponding secondary beneficiary;
- segregating said plurality of primary beneficiaries into a plurality of contract groups, each with a respective type of contract, wherein each primary beneficiary of a respective contract group has (i) substantially similar demographics as compared with others in the same contract group, and (ii) a substantially similar contract compared with others in the same contract group;
- monitoring, via said computer system, compliance with contractual parameters which parameters define unique attributes of a respective type of contract for said respective contract group, said contractual parameters including: (i) a beginning of an increasing income payment period, said beginning of said increasing income period selected by said primary beneficiary after a term of years and based upon the presence or absence of a prior constant level income payment period, (ii) an expiration parameter representing an ending of said increasing income payment period, (iii) the presence or absence of an income target value, and, (iv) the presence or absence of an invasion of principal parameter;
- monitoring, via said computer system, the investment of funds created by said subscriber payments on behalf of said primary beneficiaries in compliance with said contractual parameters for said plurality of contracts;
- directing and reporting, via said computer system, the payment of increasing income to primary beneficiaries surviving others in said respective contract group of said plurality of contract groups.
40. A computerized method for monitoring and maintaining a financial product as claimed in claim 39 wherein one type of contract, of said plurality of contracts, includes an annuity, a pension and an irrevocable trust.
41. A computerized method for monitoring and maintaining a financial product as claimed in claim 39 wherein mortality tables are used in segregating primary beneficiaries.
42. A computerized method for monitoring and maintaining a financial product as claimed in claim 41 the type of contract is an irrevocable trust and monitoring the investment of funds includes monitoring one or more certificates of deposit, stocks, bonds, commodities and real estate financial investments.
43. A method for establishing a financial product, purchased by a plurality of subscribers, paying increasing income to a plurality of primary beneficiaries based upon their comparable survival, the method comprising:
- segregating said plurality of primary beneficiaries into a plurality of groups having similar actuarial characteristics;
- assuring compliance with contractual parameters for each group, said contractual parameters including: (i) a beginning of an increasing income payment period, said beginning of said increasing income period selected by said primary beneficiary after a term of years and based upon the presence or absence of a prior constant level income payment period, (ii) an expiration of said increasing income payment period, (iii) the presence or absence of an income target value, and, (iv) the presence or absence of an invasion of principal parameter;
- monitoring the investment of funds created by said subscriber payments on behalf of said primary beneficiaries in compliance with said contractual parameters; and
- directing the payment of increasing income to primary beneficiaries surviving others in the respective group.
44. A method for establishing a financial product as claimed in claim 43 wherein one type of contract, of said plurality of contracts, includes an annuity, a pension and an irrevocable trust.
45. A method for establishing a financial product as claimed in claim 43 wherein mortality tables are used in segregating primary beneficiaries.
46. A method for establishing a financial product as claimed in claim 44 the type of contract is an irrevocable trust and monitoring the investment of funds includes monitoring one or more certificates of deposit, stocks, bonds, commodities and real estate financial investments.
Type: Application
Filed: Feb 9, 2005
Publication Date: Jul 7, 2005
Inventor: Bernard Hagan (San Francisco, CA)
Application Number: 11/054,237