U.S. patent application number 13/661747 was filed with the patent office on 2013-02-21 for separation insurance system.
The applicant listed for this patent is Johan Renes, Allen Turner, Mark Veldhuizen. Invention is credited to Johan Renes, Allen Turner, Mark Veldhuizen.
Application Number | 20130046564 13/661747 |
Document ID | / |
Family ID | 47045843 |
Filed Date | 2013-02-21 |
United States Patent
Application |
20130046564 |
Kind Code |
A1 |
Veldhuizen; Mark ; et
al. |
February 21, 2013 |
SEPARATION INSURANCE SYSTEM
Abstract
Described is a computerized system for offering financing to
applicants seeking financing for the purchase of real estate. The
system comprises gathering information from the applicants
regarding the applicants and the real estate; calculating, with
computerized software, a separation insurance policy premium for
the applicants based upon this and other information; determining
the insurance policy price with the mortgage financing; offering
the mortgage financing, coupled with the insurance premium, to the
applicants; if the applicants accept, entering into a legally
binding agreement memorializing the separation insurance policy;
periodically and regularly charging the calculated periodic amount
to the applicants; and administering the separation insurance in
such a manner that, upon divorce or legal separation of the
applicants, payments are made on behalf of the applicants for the
real estate.
Inventors: |
Veldhuizen; Mark;
(Zoetermeer, NL) ; Renes; Johan; (Amersfoort,
NL) ; Turner; Allen; (Salt Lake City, UT) |
|
Applicant: |
Name |
City |
State |
Country |
Type |
Veldhuizen; Mark
Renes; Johan
Turner; Allen |
Zoetermeer
Amersfoort
Salt Lake City |
UT |
NL
NL
US |
|
|
Family ID: |
47045843 |
Appl. No.: |
13/661747 |
Filed: |
October 26, 2012 |
Related U.S. Patent Documents
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Application
Number |
Filing Date |
Patent Number |
|
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12456874 |
Jun 24, 2009 |
8301469 |
|
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13661747 |
|
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61132994 |
Jun 24, 2008 |
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Current U.S.
Class: |
705/4 |
Current CPC
Class: |
G06Q 40/025 20130101;
G06Q 40/08 20130101 |
Class at
Publication: |
705/4 |
International
Class: |
G06Q 40/08 20120101
G06Q040/08 |
Claims
1. A method comprising: collecting information about applicants for
an insurance policy having a divorce or legal separation clause,
wherein the applicants are also applying for financing of
refinancing of a real estate loan that includes periodic payments
from an entity; entering the information into a computerized
software program; calculating, utilizing at least some of the
collected information and via the computerized software program, a
periodic amount that would be charged the applicants for the
insurance policy if the insurance policy were issued, said
calculated periodic amount to include the real estate loan payment;
transmitting information concerning the periodic amount to be
charged by the entity to the applicants for the applicants'
consideration; offering the insurance policy to the applicants; the
applicants accepting or declining the offered insurance policy and,
wherein, upon accepting the offered insurance policy, creating a
legally binding document memorializing the insurance policy by
transforming a blank document with at least some of the
information, by computer or other electronic means, into a
completed, legally binding document, wherein the completed, legally
binding document sets forth terms and conditions of the insurance
policy; transmitting the completed, legally binding document to the
applicants; periodically and regularly charging the calculated
periodic amount to the applicants; periodically and regularly
paying the periodic amount for the insurance policy on behalf of
the applicants; and the entity administering the insurance policy
in such a manner that, upon divorce or legal separation of the
applicants, at least some of any remaining periodic payments under
the real estate loan to be charged the applicants are paid under
the insurance policy for the benefit of the applicants.
2. The method according to claim 1, wherein the entity only offers
to the applicants real estate loans having the insurance
policy.
3. The method according to claim 1, wherein the calculated periodic
amount is changed in view of changed circumstances.
4. The method according to claim 3, wherein the changed
circumstances include a change in value of the real estate
underlying the real estate loan.
5. The method according to claim 1, further comprising utilizing
means to prevent or to reduce fraud on the part of the applicants
with respect to the insurance policy.
6. The method according to claim 1, wherein the insurance policy
includes terms relating to the passing away of one of the
applicants.
7. The method according to claim 1, wherein the insurance policy
comprises a clause providing a payment at an end date of the
insurance policy if the applicants do not legally divorce or
separate.
8. The method according to claim 5, wherein payment under the
insurance policy is dependent upon the applicants periodically and
regularly paying the entity the periodic amount for at least a
period of two years before making a claim.
9. The method according to claim 5, wherein the insurance policy
comprises a clause for a minimum duration of the subject
contractual relationship before any coverage is obtained or a
clause limiting coverage for a certain time interval after the
initiation of the insurance policy.
10. The method according to claim 1, wherein the applicants receive
a reduced interest rate on the underlying real estate loan
financing in consideration for paying for the insurance policy.
11. The method according to claim 10, wherein, if divorce or
separation of the applicants occurs during the insurance policy's
term, the applicants owe the entity a higher interest rate on the
real estate financing.
12. In a method of offering financing to applicants comprising a
couple seeking financing for purchase of a piece of residential
real estate, the improvement comprising: gathering information from
the applicants regarding the applicants and the residential real
estate to be financed and entering that information into
computerized software; calculating, with the computerized software,
a separation insurance premium for the applicants based upon the
information, said separation insurance premium being in addition to
any payments for the real estate financing, said separation
insurance premium and payments for the real estate financing being
a calculated periodic amount; offering the real estate loan
financing, coupled with the separation insurance premium, to the
applicants as a calculated periodic amount; if the applicants
accept the offer, creating a legally binding document memorializing
a insurance policy by transforming a blank document with at least
some of the gathered information, by computer or other electronic
means, into a completed, legally binding document, wherein the
completed, legally binding document sets forth terms and conditions
of the separation insurance policy, and transmitting a copy of the
completed, legally binding document to the applicants; periodically
and regularly charging the calculated periodic amount to the
applicants; and administering the insurance policy in such a manner
that, upon divorce or legal separation of the applicants, a portion
of the payments for the real estate financing is paid for the
benefit of the applicants.
13. The method according to claim 12, wherein risks associated with
the separation insurance are offset by requiring payment of a
pre-determined percentage of any increase in value in the
underlying real estate to an insurer in the event the applicants
divorce or separate.
14. (canceled)
15. A process for generating an insurance quote to be charged
applicants for a real estate loan from a lender, wherein the real
estate loan is intended to fund a purchase of real estate by the
applicants, the applicants comprise a legally cohabiting couple
intending to purchase the real estate, and the insurance quote is
for insurance insuring the legal separation or divorce of the
legally cohabiting couple and is for the benefit of the applicants,
the process comprising: gathering cohabitation data from the
applicants concerning their cohabitation; entering the gathered
cohabitation data into a computer comprising a central processing
unit and memory storage means; determining the acceptability of the
real estate loan for the applicants and depicting the acceptability
on a video monitor associated with the computer; obtaining data
from a lender's electronic database, wherein at least a first
portion of the data in the lender's electronic database is provided
to the lender by the applicants in connection with obtaining the
real estate loan from the lender; automatically underwriting an
insurance risk for purchase of the real estate in view of the data
and the cohabitation data; generating the insurance quote for
payments from the applicants to start with the real estate loan
utilizing the data obtained from the lender's electronic database,
the insurance quote being for the provision of insurance to cover
purchase of the real estate intended to be purchased by the
applicants and for the direct benefit of the applicants utilizing
the real estate loan upon the event of the divorce or legal
separation of the applicants; and advising the applicants of the
acceptability of the real estate loan and providing the insurance
quote to the applicants contemporaneously therewith if the real
estate loan has been accepted.
16. The process of claim 15, wherein the insurance quote is
provided by the lender to the applicants.
17. The process of claim 15, wherein the insurance quote is
provided by an insurance provider to the applicants or the
lender.
18. The process of claim 17, wherein underwriting the insurance
risk further comprises: providing a plurality of insurance
companies for underwriting the insurance risk; and determining a
set of terms for each of the plurality of insurance companies for
which each of the plurality of insurance companies will accept the
insurance risk.
19. The process of claim 15, wherein issuance of the real estate
loan to allow the applicants to purchase the real estate is
conditional upon acceptance of the insurance and entry into a
contract therefor.
20. The process of claim 15, further comprising: storing the data
in the computer after providing the insurance quote; and providing
an additional insurance quote in response to a request by the
applicants.
21. The process of claim 15, wherein a second portion of the data
is obtained from a credit bureau.
Description
CROSS-REFERENCE TO RELATED APPLICATION
[0001] This application is a continuation of co-pending patent
application U.S. Ser. No. 12/456,874 filed on Jun. 24, 2009, U.S.
Pat. No. 8,301,469 (Oct. 30, 2012), and both claim benefit under 35
U.S.C. .sctn.119(e) of U.S. Provisional Patent Application Ser. No.
61/132,994, filed Jun. 24, 2008, the contents of the entirety of
each of which are incorporated herein by this reference.
TECHNICAL FIELD
[0002] The disclosure relates to the field of computerized methods
and associated computer systems for use in insurance, particularly
mortgage finance insurance including coverage for termination of
marriage or cohabitation contracts, be it through breach or mutual
consent of the contracting parties or for other reasons. More
particularly, the disclosure relates to separation insurance
generally, and to mortgage finance insurance taking into
consideration the potential for divorce (or legal separation, the
two are used interchangeably herein) of the borrowers
especially.
BACKGROUND
[0003] An unfortunate event in the life of many a pair or couple is
a break up, separation or divorce. Sometimes, couples get married
too early; sometimes after marrying they fall in love with someone
else; sometimes the couple suffers a tragedy such as the loss of a
child; and sometimes they suffer financial difficulties which make
life together difficult. The couple breaks up. Whatever the reason
behind a couple's divorce, there are generally serious financial
consequences. This situation even extends to couples who are not
married, but who are living together where "palimony" may be
awarded.
[0004] Part of the financial problem associated with divorce is
that associated with any mortgage the couple might have. Now,
instead of the couple paying for their home, the couple supports
two households with various redundancies in needs (e.g., rent,
electricity, utilities). Failure to make payments leads to problems
for the financial institution handling the mortgage.
[0005] In the US, the judicial system generally administers family
law matters such as divorces. The court (or a court ordered
commission) splits the marital estate and decides who pays the
mortgage, which lives in the home, who is awarded custody of the
children, assets, liabilities, and who pays child support and
alimony. Even though there may be a court order ordering one member
of the pair to pay the mortgage, that person may be reluctant to do
so, particularly if he or she is not the one living in the house.
Despite its best efforts, the judicial system leaves much to be
desired in this highly personal and charged situation.
[0006] Besides the judicial system, people have tried various
private methods to protect what they perceive to be their assets
from the former spouse. Such private means have included prenuptial
agreements, trusts, alternate dispute resolution, such as
mediation, for splitting the marital property, etc. See, e.g., US
Patent Application Publications US 2003/0074231 A1 to Renes et al.
(Apr. 17, 2003), US 2003/0200124 A1 to Kiramittchian et al. (Oct.
23, 2003), and US 2005/038681 A1 to Covert (Feb. 17, 2005), the
contents of each of which are incorporated herein in their
entirety.
SUMMARY OF THE INVENTION
[0007] Disclosed are computerized methods of doing business and
associated systems. The method comprises collecting information
about applicants (e.g., a married or cohabiting heterosexual or
homosexual couple or polygamous group) for a mortgage finance
insurance policy that has a divorce or legal separation clause or
rider.
[0008] The applicants (the "pair" as used herein whether they be a
husband and wife, gay couple, or polygamous grouping) will
typically be applying for financing or refinancing of a mortgage
(which term, as used herein, includes not only traditional
mortgages and associated loans, but land sales contract and trust
deed financing) that includes periodic (e.g., monthly) payments. In
the method and associated computer system, the information is
transmitted (e.g., electronically such as via email or the
Internet) to an entity for entry into a computerized software
program and system. The entity calculates, using at least some of
the collected information and via a computerized software program
(that may be Internet based), a periodic amount that would be
charged the pair by the entity for a separation insurance policy as
a rider to mortgage financing if the insurance policy were issued.
Information concerning the periodic amount to be charged by the
entity is transmitted to the pair for the pair's consideration. The
insurance policy may be offered at the same time to the pair, or
merely a preliminary offer might be transmitted (e.g., one based
upon the confirmation of information about the pair). Once formally
offered, the pair may accept or decline the offered separation
insurance policy. Acceptance of the offer by the pair is
communicated to the entity.
[0009] The entity then creates a legally binding document
memorializing the insurance policy (e.g., an insurance contract) by
transforming a blank document (e.g., electronic or paper) with at
least some of the information provided by the pair, by computer or
other electronic means, into a completed, legally binding document
(e.g., a contract in the form of an unalterable, e.g., "pdf,"
document). A depiction of the completed, legally binding document
setting forth the terms and conditions of the insurance policy may
be transmitted electronically to a computer, where it is depicted
on an associated video screen for, e.g., the applicants' and/or the
salesperson's review and consideration. The completed, legally
binding document sets forth the terms and conditions of the
insurance policy. The entity then transmits the completed, legally
binding document to the pair (e.g., by mail, courier, Internet or
email depending on the document's form).
[0010] Going forward, the pair (or their agent) is periodically and
regularly charged the calculated periodic amount. Likewise,
periodically and regularly the periodic amount for the insurance
policy may be paid on behalf of the pair. The insurance policy is
administered in such a manner that, upon divorce or legal
separation of the pair, at least some of any remaining periodic
payments under the mortgage to be charged the pair and/or damages
associated with the divorce or separation are paid to either the
insured pair or the mortgage finance company for the pair's benefit
under the insurance policy.
[0011] Preferably, in the method, the entity only offers to the
pair (and others similarly situated) mortgage loans having the
separation insurance policy rider so that the separation insurance
policy is, in effect, "compulsory" on couples seeking mortgage
financing from the entity. Having an insurance policy for mortgage
payments with a divorce/separation insurance rider being
"compulsory" on all potential consumers of mortgage financing
reduces the likelihood of fraud being practiced against the insurer
and allows the insurer to actuarially determine a price to be
charged for the separation insurance policy hereof.
[0012] The calculated periodic amount may be based, in part, upon
the pair's respective ages, the length of their marriage or other
relationship, each member of the pair's socioeconomics, the value
of real estate underlying the mortgage and/or the amount of equity
the pair have in the underlying real estate, and the absence or
presence of children.
[0013] The calculated periodic amount may be based or adjusted, in
part, in view of changed circumstances. Such changed circumstances
include inflation, deflation, educational achievement of the
participant or the participant's partner, birth of a child, death
of a child, disability of a participant, death of a partner,
disability of a partner, return on investment of investments made
with the periodic amounts, and any combination thereof.
[0014] Administering the insurance policy typically involves
investing at least a portion of the periodic amount (e.g., for
capital gains, dividends, and interest). The administration and the
policy itself will also typically include utilizing means to
prevent fraud.
[0015] In certain embodiments, the insurance policy will include a
clause providing a payment at an end date of the policy if the pair
remains together and does not divorce or separate.
[0016] In certain embodiments, the separation insurance policy
comprises a clause for a minimum duration of the subject
contractual relationship before any coverage is obtained. In
certain preferred embodiments, the payment is dependent upon the
pair periodically and regularly paying the entity the periodic
amount for at least a period of two years, preferably a period of
five years.
[0017] In certain embodiments, the separation insurance policy
comprises a clause limiting coverage for a certain time interval
after the initiation of the separation insurance policy.
[0018] In certain embodiments, an entity or a party not a member of
the pair (e.g., one of the parties' parents or employer)
periodically and regularly pays the periodic amount on behalf of
the pair.
[0019] It would a significant improvement to the well-being of many
if the risk of divorce or split up of a pair or couple with respect
to, e.g., payment of a mortgage could be delayed and/or spread over
a larger group of people, such as is the situation with health or
life insurance. Such insurance could be voluntary or mandatory
(e.g., as part of the mortgage loan in order to get a better rate
of interest on the mortgage loan).
[0020] Accordingly, provided is a mortgage financing insurance
policy for a pair or group seeking financing that includes a
provision for the pair or group divorcing or legally separating.
Also provided are a computer and associated computer program for
administering the separation insurance policy hereof.
BRIEF DESCRIPTION OF THE FIGURE
[0021] FIG. 1 is a block diagram depicting a system for processing
and supervising separation insurance associated with a particular
mortgage.
DETAILED DESCRIPTION OF THE INVENTION
[0022] Divorce insurance (which includes separation insurance as
used herein) covers the financial damages associated with divorce
or separation. For example, it may include the direct costs of a
divorce and/or the consequential damages of a divorce. In the
instant case, it relates to insuring the risk associated with
residential borrowers purchasing real estate with financing.
[0023] "Real estate", as used herein, will generally include a
home. A home can include, for example any dwelling such as a
single-family home, a condominium, cooperative, mobile home, vacant
land for a home, a duplex, or a multiple dwelling unit building. It
can also include commercial real estate including land and
buildings.
[0024] Divorce insurance is "general insurance," somewhat similar
to disability insurance. The primary characteristic of such
insurance is not that, at a certain moment, it will play a role,
but it covers merely the possibility of an uncertain future
unfortunate event. That is, with divorce, a question. For instance,
divorce can be at one's own instigation. In insurance, liability is
however generally based upon events outside the control of the
insured parties.
[0025] If a divorce or other separation occurs (for whatever
reason), that can be seen as an external event, then at least the
conditions for "coverage of damage" have been met.
[0026] Accordingly, divorce insurance is a complicated product for
an insurer to price and actuarially determine risk. Due to, for
instance, the potential for fraud, e.g., people ("self-selectors")
who know they are unhappy in their relationship can apply for
insurance (also called "self-selection").
[0027] Rather than being dependent on chance, divorce, by
definition, occurs at the request of the insured and/or his or her
partner. Insured people can have foreknowledge of troubles in their
relationship, which the insurer does not have, and in this way, the
potential for fraud applies. The divorce insurer has no simple
selection mechanism, such as conducting a physical examination as
in disability insurance.
[0028] The insurer offering divorce insurance can, however, reduce
these risks. For example, benefits follow only after the insurance
has run for a number of years. Or by offering limited coverage,
e.g., the insurer pays only a fixed benefit. The benefit is limited
to reduce potential losses.
[0029] Another issue is that divorce is not irreversible. An
insured person of the pair may--if he or she does not already
foresee it--again marry or cohabit with his or her ex-spouse.
Divorce damages can then be partially covered, as a result of
which, the insurance benefit can be afterwards larger than the
premiums. These reasons make divorce insurance considerably
susceptible to fraud and therefore sharp acceptance guidelines must
be established, which protects the insurer against fraud.
[0030] For a determination of risk and premium calculation,
sufficiently relevant data is available. For instance, in the
Netherlands, Central Bureaus of Statistics, or "C.B.S." has
developed statistics on marriage and divorce. The general chance of
divorce can be readily determined, from which a premium can be
calculated. However, the data are lacking for chances and premiums
by commencement age at calculation. Although somewhat based upon
data collected and analyzed in the Netherlands, the data should be
also applicable to the United States, with possible modifications
due to legal constraints and demographic other associated
factors.
[0031] Also, with respect to divorce factors that stipulate the
chance of divorce and the costs of divorce in the Netherlands, this
research has been particularly performed by the C.B.S., and the
Netherlands Interdisciplinary Demographic Institute (or the
NIDI).
[0032] For married or co-habiting candidates choosing divorce (or
separation) insurance voluntarily, fraud potentially plays a large
role in choosing to obtain the insurance. The insurance candidate
knows how well the marriage or relationship is going, but the
insurer does not have this knowledge or information. Obtaining this
information is not very easy for the insurer. This situation makes
it (for an insurer) very difficult to determine a fair premium
justified solely on the basis of general statistics and other
demographic or socioeconomic divorce factors. Accordingly, offering
"voluntary" divorce insurance is less preferred.
[0033] If divorce insurance tied to mortgage financing of real
estate is entered into with a more established marriage (e.g.,
dependent on the length of time of the marriage and the presence of
children), the potential for fraud should be less. However, even
then, that does not exclude the potential that the marriage or
insurance policy was entered into with a view to obtaining the
benefits of the insurance, and afterwards possible renewed
cohabitation. Also here, "mail order brides" are a potential
problem. Thus, it seems, for a commercially very attractive group,
chosen with very good selection techniques and protected with
strict insurance conditions, a solution could be found. Drafting
and testing thorough, well thought out questionnaires, etc., for
gathering information (e.g., electronically or on the Internet) is
preferred.
[0034] With respect to insurance having a compulsory divorce
insurance rider, the potential for fraud is lessened. Insurance can
be thought linked to a product, e.g., to a mortgage or similar
trust deed financing. However, laws against discrimination must of
course be obeyed.
[0035] In the Netherlands, for instance, traditional marriage is
still very dominant, but there are, of course, other types of
households. The impact of breaking up a relationship will be for
unmarried partners living together frequently just as serious as
for married people. However, because little data exists for these
other households (e.g., no registry of births, deaths and marriages
exists for unmarried partners living together (irrespective of the
presence or absence of a written cohabitation agreement)) and
absent data from this group, it would be very difficult to offer
them insurance.
[0036] Capital insurance, which gives a lump sum payment, could
cover both the direct and consequential damages of divorce or
separation.
[0037] Direct damage are those damages that arise from the divorce
itself, such as the costs of a lawyer, a notary public (in certain
countries), court fees, and moving expenses. Also, the capital
benefit could cover the payment of the mortgage interest or other
payments (at least temporarily), so that the underlying home need
not be sold in haste at a "fire sale." Insuring direct damage is
not contrary to the general insurance philosophy, laws, or
regulations.
[0038] To cover consequential damages, by means of capital
insurance where the capital (amount invested in the insurance)
would preferably limit the amount of consequential damages to no
more than the amount of premium paid.
[0039] An insurance policy which, after divorce, pays periodically
to cover the consequential damages of divorce is possible, under
the condition that the benefit terminates or is adapted at
remarriage or cohabitation with the ex-partner or a new partner.
Then, consequential damages (partly) would be complete. Such
conditions would mean that the interest benefit is an
entitlement.
[0040] Concealing later cohabitation would, of course, improperly
produce a benefit to the insured couple. In the insurance contract
created between the parties, provisions are preferably incorporated
to take into consideration improper benefits under the policy. In
general, the insurance could be cancelled on a yearly basis by the
insured person or insurance entity. Such a provision would
preferably be included in a voluntary divorce insurance policy to
reduce the potential for fraud. Such a provision is less necessary
for compulsory insurance.
[0041] General insurances are not generally entered into where
premium payments are included in the purchase price. There are
however exceptions, such as unemployment insurance, which cover the
associated damages, and are entered into upon financing a mortgage
on the underlying real estate (e.g., a house). The purchase price
of unemployment insurance can thus be financed with the house
financing. Divorce or separation insurance can be also entered into
against the purchase price, for example, in the same manner as
unemployment insurance, but taking the disclosure hereof into
consideration.
[0042] For instance, the net purchase price together with the cash
value of the sum of the chance of divorce in year t of insured the
period with insured the benefit in year t of insured the period has
been multiplied. The years t run from the beginning to the end of
insured the period. The purchase price to pay the net purchase
price raises with costs.
[0043] For calculating the chance of divorce, data sufficient are
available by means of statistics and demographics, which, in
general, influence the chance of divorce. Thereafter, the premium
for divorce insurance is calculated. A problem of divorce insurance
is the potential fraud of the insured people and unavailability of
divorce to unmarried households. The potential for fraud make it
very difficult for the insurer, as a matter of voluntary insurance,
to determine premiums. The unavailability of divorce to unmarried
couples could eventually give rise to problems with, e.g., state
insurance regulations. Thus, voluntary divorce insurance is only
possible using the strictest criteria, screening, and scrutiny.
Compulsory insurance is thus preferred.
[0044] A mortgage financing insurance policy of the invention for
the compensation of financial consequences of ending a marriage by
divorce can be relatively straightforward. It can consist of only
one installment (which will typically be rather high) or weekly,
monthly, or yearly (or any other term) installments with respect to
the underlying real estate. Payments preferably start with the
mortgage. They can be entered into by the (future) contract
partners, or by entities wishing to provide at least one such a
(future) contract partner with such insurance. They can be entered
into at any age of the (future) contract parties.
[0045] The monies paid can be purely fees for the insured financial
risks, but they can also be (partially) investments in stock and
the like, which may provide for a sum to be paid at a certain end
date of the separation insurance policy. Such an end date may be
the event that was insured, but it may also be a certain duration
of the contractual relationship, or the reaching of a certain age
of a contract partners or both partners. It may also be the passing
away of one of the partners. This way the separation insurance
policy becomes part of another (life) insurance policy. In similar
ways, the separation insurance policy can be part of another
insurance policy or comprise (parts of) other insurance
policies.
[0046] The separation insurance policy of the invention may also
comprise other contractual arrangements or made part of another
contract such as an employment contract (e.g., offered as an
employee benefit). Also, although the insurance payment may be
limited to a payment of the mortgage for a fixed period of time to
avoid a "fire sale" (e.g., from six months to two years), the
financial consequences to be covered could also be simply a fixed
payment of an amount of money, or by, for example, reimbursement of
legal fees, covering moving costs and clean up costs for the real
estate, or making alimony payments or children support payments
(e.g., for children resulting from the contractual relationship) or
a combination of the above and similar costs to be expected.
[0047] The monies required to be paid for such insurance depends on
many different parameters. It depends on the age at which the
policy is entered. It depends on the demographics of the area where
the contract partners are.
[0048] The amount to be charged depends on several items associated
with the value of the policy. For instance, it could depend on the
age of the contracting partners. It could depend on the investments
to be made and historical returns on investments, etc. Once
apprized of the invention, people of skill in the art in designing
insurance policies will be capable of designing suitable policies
and using them. As a simple example, any personal insurance giving
payment at a certain age can be modified to accommodate the
invention.
[0049] The amount to be charged (i.e., the premium) could be
increased as the number of children increases. The amounts for the
premium could be decreased as a child passes a certain age (e.g.,
18 or 21 years). As with "universal life" polices, the premiums
could be refunded if there were no divorce by a certain,
predetermined age of the insured (e.g., 55, 60, or 65 or any other
suitable age to be determined by the particular circumstances).
[0050] Disclosed is a method of doing business which includes
determining a periodic (e.g., monthly, semiannually or annually)
amount to be charged a prospective participant for divorce
insurance; charging that periodic amount (or "premium") to a
participant in an insurance program over a period of time; and
administering the insurance program (e.g., confirm that a divorce
has or has not occurred, receiving and making payments, etc.)
[0051] The pair (or "applicants") may receive a reduced interest
rate on the underlying mortgage financing in consideration for
paying for a divorce insurance policy clause in the mortgage
financing. If divorce or separation of the pair occurs during the
term of the mortgage insurance policy, the reduced interest rate
could reverse, and the pair owes the entity a higher interest rate
retroactively to the mortgage insurance policy's origination
date.
[0052] The amount to be charged a prospective participant will
generally be based upon the prospective participant's age and the
prospective participant's spouse or the age of the partner(s)
thereof, both at the time of the marriage and at the time of paying
the particular premium. The amount to be charged will also
typically be based, in part, on the prospective participant's
projected earnings and/or the prospective participant's spouse's
projected earnings. The amount charged a participant can be changed
in view of changed circumstances in the lifestyle (e.g., income or
health) of the participant. Other changed circumstances include
inflation, deflation, educational achievement of the participant or
the participant's spouse, birth of a child, death of a child,
disability of a participant, disability of a spouse, return on
investment of investments made with the periodic amounts, and any
combination thereof.
[0053] Analysis for socioeconomic/demographic factors of the couple
(e.g., age, age difference between the respective members of the
couple, educational backgrounds, previous marital status, health of
the respective partners, whether or not the couple already has
children), projected inflation rate over the life of the policy,
projected investment return over the life of the policy, assets of
the respective partners, and life styles to which the members of
the couple have become accustomed or will likely be accustomed can
be conducted by the insurance company. For example, people with
less chance of a divorce could be charged a lower premium.
[0054] Once determined and collected, at least a portion of the
periodic amount will be invested by the insurance company in
appropriate investments. Such investments are well known to those
of skill in the art, but generally include, stocks, bonds, bank
accounts, fixed income investments, venture capital investments,
and so forth. Once invested, the collected funds should grow for
eventual distribution to either participants or owners of the
insurance company.
[0055] In order to collect on the policy, satisfactory proof of
divorce (e.g., certified copies of court documents) would
preferably need to be provided to the insurance company (or
otherwise collected by the insurance company) and certifications
made to insure that the couple has actually physically separated
before payment was made. Continuing certification that the couple
remains separated could be required (e.g., annually) before
payments under the policy are continued. If a couple remarries, a
refund of at least some of the payments made could be required,
although this is not necessary in all embodiments and
circumstances.
[0056] Payments on behalf of the participant (e.g., to the mortgage
holder or former partner or spouse) would be preferably made over
time, with few or no lump sum payments thus decreasing the impetus
for any fraud. The requirement to pay premiums could be continued
after the divorce or separation not unlike health insurance
premiums. Payments for child support preferably cease when a child
reaches 18 or 21 (if the child attends post-secondary education,
for example, goes to college). Alimony payments could cease or be
reduced when the former partner gets a job or remarries.
[0057] As with all insurance policies, the policy of the instant
invention has a potential for abuse (e.g., by fraud). Preferably,
the policy will include contractual features to prevent such fraud.
For instance, the policy could include a waiting period (e.g.,
three (3) to five (5) years or any other time period) before the
policy becomes effective. If the couple separates earlier than the
time period, premiums could be refunded with or without interest.
Furthermore, if the couples remarries or cohabitates for a long
time period after separation or divorce, payments should cease and
perhaps repayment made to the insurer.
[0058] As with most businesses, the offering and administration of
the program could be administered and operated as an on-line
business.
[0059] The separation insurance policy is administered with the aid
of a computer or computers and associated software. Such software
will typically run on a netbook, main frame or other commercially
available computer that includes a central processing unit, memory,
data files, and associated storage. It will typically be used to
print up the policy on a commercially available printer or display
aspects of the policy on a video monitor.
[0060] As described herein, in various embodiments, one or more
server(s), client computer(s), application computer(s) and/or other
computer(s) can be utilized to implement one or more aspect of the
invention. Illustrative computers can include, for example: a
central processing unit; memory (e.g., RAM, etc.); data storage
(e.g., hard drives, etc.); input/output ports (e.g., parallel
and/or serial ports, etc.); data entry devices (e.g., key boards,
etc.); etc. In addition, client computers may contain, in some
embodiments, browser software for interacting with the server(s),
such as, for example, using hypertext transfer protocol (HTTP) to
make requests of the server(s) via the Internet or the like.
[0061] A netbook is a small portable laptop computer designed for
wireless communication and access to the Internet. Primarily
designed for web browsing and e-mailing, netbooks rely heavily on
the Internet for remote access to web-based applications and are
targeted increasingly at cloud computing users who require a less
powerful client computer. Netbooks typically run Windows XP or
Linux operating systems rather than more resource-intensive
operating systems like Windows Vista. Netbooks tend to range in
size from below 5 inches to over 13 inches, typically weigh about a
kilogram, and are often significantly less expensive than general
purpose laptops.
[0062] According to Deloitte, as of the start of 2009, the
established definition of a netbook was a notebook computer with a
low-powered x86-compatible processor (compatible with PC standard
software), small screen (no larger than 10 inches), (usually) small
keyboard, equipped with wireless connectivity, lightweight (under
three pounds/1.3 kilograms) and no optical disk drive. Netbooks are
typically low cost, relative to other notebooks.
[0063] During the application process, a computerized form will
typically be required to be filled out by the prospective
participants. The data from the form can be utilized by the
computer or netbook and associated network to determine a periodic
amount.
[0064] The computer's software preferably includes means for
determining a periodic amount to be charged a prospective
participant for divorce insurance. It also preferably includes
means for charging that periodic amount to a participant in an
insurance program over a period of time (e.g., by printing and
sending bills or invoices and receiving payments, for example,
electronically). It will also preferably include means for
administering the insurance program.
[0065] For instance, in determining the amount to be charged, the
software can determine the amount to be charged a prospective
participant based, at least in part, on the prospective
participant's age and the prospective participant's partner's age.
The software can also determine the amount to be charged based, in
part, on the prospective participant's projected earnings or on the
prospective participant's partner's projected earnings. The
computer software can also determine the amount to be charged based
on the regularity of the periodic payments (e.g., monthly,
quarterly, semiannually, or annually).
[0066] The amount to be charged a participant can change in view of
changed circumstances in the participant's life or environment. For
example, the computer software can receive and interpret
information such as prevailing interest rates, the inflation rate,
the deflation situation, the economic perspective, or, on a more
personal level, educational achievement of the participant or the
participant's partner or child, birth of a child, death of a child,
disability of a participant, disability of a partner, return on
investment of investments made with the periodic amounts, and any
combination thereof.
[0067] The computer software can also be used to determine the
amount to be paid out under the policy. For example, it can take
the foregoing information into consideration and be used to
determine what sort of support a former spouse or partner needs
dependent on general and specific circumstances (e.g., rent or
house payments, health of the former partner and any children,
educational requirement of the former partner and any children,
cost of living, etc.).
[0068] The software or computer can also be used to assist in
investing at least a portion of the periodic amount. It can also be
used to administer the program by, for example, including names and
relevant information in a database (which are commercially
available).
[0069] The risks associated with the separation insurance policy
can be offset, to some degree, by requiring the payment of a
pre-determined percentage of any increase in value in the
underlying real estate to the insurer in the event the couple
divorces or legally separates.
[0070] Further disclosed is, in combination, a system (FIG. 1) for
processing and supervising divorce insurance associated with a
particular mortgage. Such a system comprises, e.g., a website, an
insurance agent, loan officer, real estate agent, real estate
broker, and/or mortgage agent who collects and enters information
about a pair of applicants for a financing insurance policy having
a divorce or legal separation clause, wherein the pair is also
applying for financing of refinancing of a mortgage that includes
periodic payments. The information is collected and entered into, a
computer 10 (or terminal, netbook or similar device) via, e.g.,
keyboard 8 and transmitted (e.g., by email, telephone modem
connection, telephone call, or internet connection 12) to an entity
14 for entry (either directly or indirectly) into a computerized
software program associated with a computer 16 preferably dedicated
to this purpose.
[0071] The computerized software program will typically have access
to third party databases (e.g., credit bureau histories, associated
analyses and scoring, and current prevailing interest rates for
mortgage loans) for further assessing the applicants for insurance
and determining an amount to be charged. These third party
databases also are preferably used to verify the information
provided by the applicants.
[0072] The entity calculates, using at least some of the collected
information and the third party information and via the
computerized software program, a periodic amount that would be
charged the pair for the separation insurance policy by the entity
if the separation insurance policy were issued. The information
concerning the periodic amount to be charged is transmitted by the
entity directly or indirectly to the pair for the pair's
consideration (e.g., by depiction on a video monitor 6 associated
with the first computer, terminal, or similar device 10), and may
then offer the separation insurance policy to the pair. In certain
embodiments, she pair then may accept or decline the offered
separation insurance policy.
[0073] In certain embodiments (e.g., when the divorce or separation
insurance is compulsory with the mortgage lender), the information
is transmitted to the mortgage loan officer or other similarly
situated person, and the amount of the insurance is automatically
included within the price of the mortgage loan and the entire
package is offered to the applicants.
[0074] Upon accepting the offered separation insurance policy,
acceptance of the offer by the pair is communicated to the entity
(e.g., by the internet, real estate agent or broker, loan officer,
or a network entry point). A legally binding document memorializing
the separation insurance policy is created wherein the completed,
legally binding document sets forth terms and conditions of said
separation insurance policy. The document may be printed on a
printer 18 associated with the computer software 16 or printed
electronically (e.g., as a .pdf with software commercially
available from, e.g., Adobe.RTM. (Acrobat.RTM.) or Microsoft.RTM.
(Word.RTM.) and appropriately communicated to the applicants either
directly or indirectly through their loan officer or agent.
[0075] Periodically and regularly the pair is charged the periodic
amount determined by the software (e.g., by email or other
billings). The pair regularly pays the periodic amount for the
separation insurance policy (e.g., by electronic transfer or other
payment system).
[0076] In the event of a divorce or legal separation of the pair,
the event is reported to the entity, and at least some of any
remaining periodic payments under the mortgage to be charged the
pair are paid under the separation insurance policy (or other
policy events take place, e.g., payment of moving costs, payment to
spruce up the property, etc.)
[0077] Although the invention has been described with some degree
of particularity in order to thoroughly explain it, after being
apprized of the invention, those of skill in the art will be able
to adapt it from the particular details given herein without
departing from its full scope.
TABLE-US-00001 TABLE 1 Transaction Example for a single payment of
$10,000 (3 year restricted period, 5 year insured period, 20%
costs, 3% interest) Gross purchase price Length of marriage in
Gross purchase price ($10K periods after full years ($10K 1.sup.st
period) 1.sup.st period) 0 572 949 1 530 1125 2 485 1236 3 457 1241
4 450 1241 5 457 1220 6 456 1194 7 438 1158 8 410 1101 9 383 1043
10 357 975 11 337 927 12 323 894 13 308 858 14 298 831 15 293 807
16 288 787 17 283 773 18 272 747 19 256 705 20 235 650 21 218 605
22 202 563 23 185 520 24 169 479 25 151 429 26 133 379 27 117 338
28 101 296 29 86 256 30 73 224 31 62 194 32 55 172 33 51 155 34 48
142 35 44 130 36 41 123 37 38 117 38 34 110 39 30 101 40 25 90
TABLE-US-00002 TABLE 2 Transaction Example for a single payment of
$10,000 (3 year restricted period, 10 year insured period, 20%
costs, 3% interest) Gross purchase price Length of marriage in
Gross purchase price ($10K periods after full years ($10K 1.sup.st
period) 1.sup.st period) 0 1790 2168 1 1612 2206 2 1519 2271 3 1455
2239 4 1438 2230 5 1430 2193 6 1396 2134 7 1330 2051 8 1237 1928 9
1148 1808 10 1066 1685 11 1008 1599 12 971 1542 13 935 1485 14 909
1442 15 888 1402 16 867 1366 17 848 1338 18 810 1285 19 757 1207 20
690 1105 21 634 1020 22 582 943 23 528 863 24 477 787 25 418 696 26
357 603 27 310 530 28 263 458 29 223 393 30 193 343 31 167 300 32
150 267 33 136 240 34 123 217 35 109 195 36 95 177 37 84 163 38 73
149 39 64 134 40 56 120
TABLE-US-00003 TABLE 3 Chance of a divorce (1.sup.st column "Year
of marriage," and each year thereafter) ("n/a" is not applicable).
Year of marriage 0 1 2 3 4 5 6 7 8 9 1996 0.001 0.009 0.022 0.030
0.040 0.042 0.033 0.026 0.024 0.023 1997 0.000 0.010 0.019 0.025
0.037 0.038 0.035 0.030 0.024 0.023 1998 0.001 0.011 0.020 0.020
0.029 0.032 0.029 0.027 0.026 n/a 1999 0.001 0.011 0.020 0.022
0.024 0.026 0.027 0.026 n/a n/a 2000 0.001 0.013 0.022 0.024 0.025
0.022 0.025 n/a n/a n/a 2001 0.001 0.013 0.025 0.027 0.029 0.027
n/a n/a n/a n/a 2002 0.001 0.008 0.017 0.022 0.025 n/a n/a n/a n/a
n/a 2003 0.001 0.008 0.016 0.017 n/a n/a n/a n/a n/a n/a 2004 0.001
0.009 0.018 n/a n/a n/a n/a n/a n/a n/a 2005 0.001 0.009 n/a n/a
n/a n/a n/a n/a n/a n/a 2006 0.001 n/a n/a n/a n/a n/a n/a n/a n/a
n/a Average 0.001 0.010 0.020 0.023 0.030 0.031 0.030 0.027 0.025
0.023
* * * * *