Method and system for processing data related to a life insurance policy having an accelerated benefit
Disclosed is a novel insurance product that provides an accelerated death benefit to the insured individual. The insurance product contains a lifeaccess accelerated benefit feature that allows the insured individual to file a claim and receive benefits under a life insurance product if the insured individual becomes chronically or terminally ill.
1. A computer system for processing data related to a life insurance policy issued by an issuer and having a death benefit payable to a beneficiary upon a death of an insured, comprising:
a data storage device for storing data related to the life insurance policy, including a current value of the death benefit, a current amount of indebtedness on the policy, and availability of periodic payments to an owner of the policy that reduce the death benefit, the periodic payments being available during a lifetime of the insured responsive to a request including data indicative of a medical condition of the insured; and
a processor, in communication with said data storage device, the processor configured to:
receive data indicative of a request for periodic payments to an owner of the policy including data indicative of the medical condition of the insured;
determine a reduction of the current value of the death benefit and a proportional reduction of the current amount of indebtedness on the policy based on one of the periodic payments and without reduction of an amount of each of the periodic payments, and provide an output signal having data indicative of the determined current value of the death benefit and the determined current amount of indebtedness on the policy.
2. The computer system of claim 1 , further comprising a generating module in communication with the processor via a bus, the generating module being configured to generate one or more insurance contract documents effective to issue the life insurance policy, the documents including provisions providing for availability of the periodic payments on condition of the request including the data indicative of the medical condition of the insured.
3. The computer system of claim 1 , wherein, responsive to each of the periodic payments, the current value of the death benefit is reduced by the amount of the periodic payment.
4. The computer system of claim 1 , wherein, responsive to each of the periodic payments, the current value of the death benefit and the current amount of indebtedness on the policy are reduced.
5. The computer system of claim 1 , wherein the processor is further configured to determine a maximum amount of the periodic payments based on a lower of (a) an amount determined based on a product of a number of days in a period for payment of periodic payments and a per diem amount and (b) an amount determined based on a product of (i) the current value of the death benefit, (ii) a percentage of the current value of the death benefit, and (iii) a periodic percentage.
6. The computer system of claim 1 , wherein there is no restriction on the use by the owner of the periodic payments.
7. The computer system of claim 1 , wherein the data indicative of the medical condition of the insured comprises data indicative of physical disability in the nature of inability to perform without substantial assistance from another individual at least two activities of daily living, and cognitive impairment in the nature of requiring substantial supervision from another individual to protect the insured from threats to health and safety due to a severe cognitive impairment.
8. The computer system of claim 1 , wherein the processor is further configured to determine, responsive to each of the periodic payments, reduced values of a face amount of the policy, an account value of the policy, surrender charges associated with the policy, the amount of indebtedness under the policy and no lapse guarantee premiums associated with the policy, the reduced values being determined based on a reduction ratio incorporating an amount of one of the periodic payments and an available benefit amount.
9. The computer system of claim 1 , wherein the processor is further configured to:
periodically determine whether the policy has a status of on claim with respect to payment of the periodic payments responsive to receipt of a request including data indicative of a medical condition of the insured;
responsive to determining that the policy does not have the status of on claim with respect to payment of the periodic payments responsive to receipt of a request including data indicative of a medical condition of the insured, deduct from an account value of the life insurance policy a charge for the availability of the periodic payments; and
responsive to determining that the policy does have the status of on claim with respect to payment of the periodic payments responsive to receipt of a request including data indicative of the medical condition of the insured, not deduct from the account value of the life insurance policy a charge for the availability of the periodic payments.
10. The computer system of claim 1 , wherein the processor is further configured to:
periodically determine whether the policy has a status of on claim with respect to payment of the periodic payments responsive to receipt of a request including data indicative of a medical condition of the insured;
responsive to determining that the policy does have the status of on claim with respect to payment of the periodic payments responsive to receipt of a request including data indicative of a medical condition of the insured, compare an amount of current deductions to the account value of the life insurance policy less the current amount of indebtedness on the life insurance policy;
responsive to determining that the amount of current deductions is not greater than the account value of the life insurance policy less the current amount of indebtedness on the life insurance policy, deduct the amount of current deductions from the account value of the life insurance policy; and
responsive to determining that the amount of current deductions is greater than the account value of the life insurance policy less the current amount of indebtedness on the life insurance policy, deduct from the account value of the life insurance policy an amount not greater than the account value of the life insurance policy less the current amount of indebtedness on the life insurance policy.
11. The computer system of claim 1 , wherein the processor is configured to determine the proportional reduction of the current amount of indebtedness on the policy based on one of the periodic payments by multiplying the current amount of indebtedness on the policy by a reduction ratio, a value of the reduction ratio being determined based on a value of the one of the periodic payments and a value of an available maximum amount of the periodic payments.
12. The computer system of claim 1 , wherein the processor is configured to determine the proportional reduction of the current amount of indebtedness on the policy based on one of the periodic payments by multiplying the current amount of indebtedness on the policy by a reduction ratio, a value of the reduction ratio being determined based on a value of the one of the periodic payments, a current value of the death benefit, and a current value of a face amount of a term rider on the policy.
13. A computer-implemented method for processing data associated with a life insurance policy issued by an issuer and having a death benefit payable to a beneficiary upon a death of an insured, comprising:
receiving by a processor, during a lifetime of the insured, data indicative of a request for periodic payments that reduce the death benefit to an owner of the policy, the request being associated with data indicative of a medical condition of the insured;
accessing by the processor an amount of the periodic payments;
determining by the processor a reduction of a current value of the death benefit and a proportional reduction of a current amount of indebtedness on the policy based on one of the periodic payments and without reduction of each of the periodic payments; and
storing by the processor in a data storage device in communication with the processor data indicative of the determined current value of the death benefit and the determined current amount of indebtedness on the policy.
14. The computer-implemented method of claim 13 , further comprising generating by a generating module in communication with the processor one or more insurance contract documents effective to issue the life insurance policy, the documents including provisions providing for availability of the periodic payments on condition of the request and the associated data indicative of the medical condition of the insured.
15. The computer-implemented method of claim 13 , further comprising determining an amount of the periodic payments as equal to an amount requested by the owner and less than an available maximum amount.
16. The computer-implemented method of claim 13 , further comprising, responsive to each of the periodic payments, reducing the amount of the death benefit by the amount of the periodic payment.
17. The computer-implemented method of claim 13 , further comprising accessing data indicative of a term during which periodic payments continue, the periodic payments ceasing at the expiration of the term unless data indicative of continuation of the medical condition of the insured is received, and wherein the term is one year.
18. The computer-implemented method of claim 17 , further comprising, at the expiration of the term, responsive to receipt of the data indicative of continuation of the medical condition of the insured, accessing data indicative of a renewal term during which the periodic payments continue.
19. The computer-implemented method of claim 13 , wherein, responsive to receipt of data indicative of death of the insured, the periodic payments cease.
20. A non-transitory computer-readable medium, having processor-executable instructions thereon for processing data associated with a life insurance policy issued by an issuer and having a death benefit payable to a beneficiary upon a death of an insured, which instructions, when executed by a processor, cause the processor to:
receive, during a lifetime of the insured, data indicative of a request for accelerated death benefits, the request being associated with data indicative of a medical condition of the insured,
access an amount of the periodic payments;
determine a reduction of the current value of the death benefit and a proportional reduction of a current amount of indebtedness on the policy based on one of the periodic payments and without reduction of an amount of each of the periodic payments, and
store in a data storage device in communication with the processor data indicative of the determined current value of the death benefit and the determined current amount of indebtedness on the policy.
21. The non-transitory computer-readable medium of claim 20 , wherein the data indicative of a medical condition comprises data indicative of certification by a licensed health care practitioner of at least one of physical disability and cognitive impairment of the insured.
22. The non-transitory computer-readable medium of claim 20 , wherein the instructions, when executed by a processor, further cause the processor, responsive to data indicative that the death benefit is zero, provide an output signal having data indicative that the periodic payments are to cease.
23. The non-transitory computer-readable medium of claim 20 , wherein the instructions, when executed by a processor, further cause the processor to transmit data relating to the periodic payments to a payment module in communication via a bus with the processor, the payment module being configured to effect the periodic payments responsive to receipt of the data relating to the periodic payments from the processor.
24. The non-transitory computer-readable medium of claim 20 , wherein the policy is one of a whole life insurance policy and a universal life insurance policy.