IP Library › Granted Patent US 7,987,132
Granted Patent B2
US 7,987,132 · App. 12/538,488 · Granted Jul 26, 2011

Computer based system for pricing an index-offset deposit product

Assignee: Genesis Financial Products, Inc.
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Quick Facts
Patent No.
US 7,987,132
App. No.
12/538,488
Granted
Jul 26, 2011
Kind
B2
Abstract

A computer-based method for determining a value of an index-offset deposit product, having a principal amount P, a term T, a specified guaranteed amount G, and an index credit C, comprising: d) setting trial values for fixed-income-linked crediting parameters for said product implying an expected fixed-income-linked credit component F at the end of the term T; e) determining a cost for an equity option paying equity-linked credit component E such that the index credit C=E+F, to be paid at T, together with the principal P, is at least equal to G; and f) summing said equity option cost, present value of principal, and present value of fixed-income-linked credit component to determine said value of said index-offset deposit product.

Claims (34)

1. A computer-based method for determining a value of an index-offset deposit product, comprising the steps of:

a) determining a cost for an equity-linked credit component and a cost for a fixed-income-linked credit component

a. such that a total index credit comprises a sum of said equity-linked credit component and said fixed-income linked credit component and is at least equal to a specific guaranteed amount;

b) summing said equity-linked credit component cost, said fixed-income-linked credit component cost, and a present value of principal to determine said value of said index-offset deposit product and

c) displaying said value of said index-offset deposit product.

2. The invention of claim 1 wherein said index-offset deposit product comprises an indexed deferred annuity.

3. The invention of claim 1 wherein said index-offset deposit product comprises an indexed life insurance product.

4. The invention of claim 1 wherein said index-offset deposit product comprises an indexed certificate of deposit.

5. The invention of claim 1 wherein said specific guaranteed amount comprises a percentage of said principal.

6. The invention of claim 1 wherein said equity-linked credit component comprises a negative value.

7. A computerized method of managing an index offset product, said method comprising the steps of:

providing a purchaser of said product with a notional allocation of principal to an equity linked allocation;

providing said purchaser of said product with a notional allocation of principal to a fixed income linked allocation;

computing an equity linked credit component;

computing a fixed income linked credit component;

computing a non-negative index credit from said equity linked credit component and said fixed-income linked credit component; and

displaying said non-negative index credit from said equity linked credit component and said fixed income linked credit component;

paying out at least a specific percentage of principal.

8. The invention of claim 7 wherein said equity-linked credit component is a negative value.

9. The invention of claim 7 wherein said equity-linked credit component is a non-negative value.

10. The invention of claim 7 further comprising the step of basing said index credit component for said equity notional allocation on a published equity index.

11. The invention of claim 7 further comprising the step of basing said index credit component for said equity notional allocation on the S&P 500 index.

12. The invention of claim 7 further comprising the step of basing said index credit component for said equity notional allocation on the NASDAQ index.

13. The invention of claim 7 further comprising the step of basing said index credit component for said fixed-income-linked notional allocation on an external index rate.

14. The invention of claim 7 further comprising the step of basing said index credit component for said fixed-income-linked notional allocation on a United States Treasury index rate.

15. The invention of claim 7 wherein said notional allocation determination is made by an issuer of said product.

16. The invention of claim 7 wherein said notional allocation determination is selected by a purchaser of said product from a set of possible notional allocations supplied by an issuer of said product.

17. The invention of claim 7 further comprising the step of paying said specific percentage of principal at an end of a specified term.

18. The invention of claim 17 wherein said term comprises a three year term.

19. The invention of claim 7 wherein said index offset product comprises an indexed deferred annuity.

20. The invention of claim 7 wherein said index offset product comprises an indexed certificate of deposit.

21. The invention of claim 7 wherein said index offset product comprises an indexed life insurance product.

22. The invention of claim 7 further comprising the step of

paying out at least said specific percentage of principal to a purchaser of said index-offset deposit product.

Continuity (2)
Continuation 10463180 · Jun 16, 2003
Related Publication 20090313050A1 · Dec 17, 2009