U.S. patent application number 14/035302 was filed with the patent office on 2014-03-06 for lifetime financial product.
This patent application is currently assigned to WELLS FARGO, N.A.. The applicant listed for this patent is Donna E. Peterson. Invention is credited to Donna E. Peterson.
Application Number | 20140067719 14/035302 |
Document ID | / |
Family ID | 42038569 |
Filed Date | 2014-03-06 |
United States Patent
Application |
20140067719 |
Kind Code |
A1 |
Peterson; Donna E. |
March 6, 2014 |
LIFETIME FINANCIAL PRODUCT
Abstract
A system and method that offers a simple product solution for
managing financial risks in retirement is provided. The product
solution combines a uniquely structured deposit product (e.g.,
certificate of deposit (CD)) together with an insurance policy
(e.g., group longevity insurance policy) to guarantee a lifetime
stream of income to a customer.
Inventors: |
Peterson; Donna E.;
(Charlotte, NC) |
|
Applicant: |
Name |
City |
State |
Country |
Type |
Peterson; Donna E. |
Charlotte |
NC |
US |
|
|
Assignee: |
WELLS FARGO, N.A.
Charlotte
NC
|
Family ID: |
42038569 |
Appl. No.: |
14/035302 |
Filed: |
September 24, 2013 |
Related U.S. Patent Documents
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Application
Number |
Filing Date |
Patent Number |
|
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12235897 |
Sep 23, 2008 |
8571896 |
|
|
14035302 |
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Current U.S.
Class: |
705/36R |
Current CPC
Class: |
G06Q 40/06 20130101;
G06Q 40/08 20130101 |
Class at
Publication: |
705/36.R |
International
Class: |
G06Q 40/06 20060101
G06Q040/06 |
Claims
1. A lifetime certificate of deposit (CD) product, comprising: at
least one processor coupled to a memory, the processor executing: a
component that identifies a CD that offers a regular interval
payment during a term prior to one of maturity or balance
depletion, wherein a balance of the CD includes principal and
interest; and a component that identifies a longevity insurance
policy established concurrently with the CD and that secures
continuation of the regular interval payment upon the earlier of
the maturity or the balance depletion.
2. The lifetime CD product of claim 1, wherein the CD is an
interest-bearing CD and wherein the regular interval payment
includes an interest portion and a principal portion.
3. The lifetime CD product of claim 2, wherein a duration coincides
with exhaustion of the CD balance which is projected to occur at a
pre-defined age or period of time.
4. The lifetime CD product of claim 2, wherein an initial or
renewal term associated with a CD term varies, and wherein the term
of the CD is at least one of three months, five years or greater
than five years.
5. The lifetime CD product of claim 2, wherein the interval is
annually.
6. The lifetime CD product of claim 2, wherein the interval is at
least one of bi-weekly, monthly, bi-monthly, quarterly or
semi-annually.
7. The lifetime CD product of claim 2, wherein the longevity
insurance policy triggers at a pre-defined customer age between 80
and 85 years or upon a pre-defined event, wherein the pre-defined
event is exhaustion of funds in a balance of the CD.
8. A revenue management system that facilitates a lifetime income
stream for a customer, comprising: at least one processor coupled
to a memory, the processor executing: a deposit product
identification component that identifies a deposit product based at
least in part upon an evaluation of the customer, wherein the
deposit product is an interest-bearing certificate of deposit (CD);
and an insurance identification component that identifies a
longevity insurance policy based at least in part upon the
evaluation and wherein the longevity insurance policy is
established concurrently with the deposit product; wherein the
deposit product or the longevity insurance policy guarantee the
lifetime income stream based upon a life of the customer, and
wherein the longevity insurance policy provides a guaranteed
payment of the lifetime income stream during the life of the
customer upon exhaustion of an initial deposit associated with the
deposit product together with applicable interest earned.
9. The revenue management system of claim 8, wherein: the deposit
product offers the income stream to the customer as a function of
an initial deposit together with an interest rate; and the
longevity insurance policy guarantees payment of the income stream
during the life of the customer upon exhaustion of the initial
deposit together with applicable interest funds.
10. The revenue management system of claim 9, wherein the deposit
product is an interest-bearing certificate of deposit (CD) that is
structured to provide systematic withdrawals of principal and
interest during a term of the CD.
11. The revenue management system of claim 9, wherein the deposit
product is structured to have a duration covering one or more
automatically-occurring renewals of the deposit product.
12. The revenue management system of claim 9, wherein the interest
rate is a fixed interest rate.
13. The revenue management system of claim 9, wherein the interest
rate is a variable interest rate.
14. The revenue management system of claim 9, further comprising:
an analysis component that evaluates demographic information of the
customer; wherein the deposit product identification component
identifies the deposit product based at least in part upon the
analysis, and wherein the insurance identification component
identifies the longevity insurance policy based at least in part
upon the analysis of the demographic information.
15. The revenue management system of claim 14, further comprising a
calculation component that computes an amount of the income
stream.
16. The revenue management system of claim 15, further comprising
an inflation projection component that estimates inflation based at
least in part upon economic factors, wherein the calculation
component employs the inflation in computation of the amount of the
income stream.
17. The revenue management system of claim 15, further comprising a
cost of living projection component that estimates a cost of living
increase or decrease based at least in part upon economic factors,
wherein the calculation component employs the increase or decrease
in computation of the amount of the income stream.
18. The system of claim 15, further comprising a machine-learning
and reasoning component that employs at least one of a
probabilistic and a statistical-based analysis that infers the
amount of the income stream based at least in part upon demographic
information of the customer.
19. A computer-implemented method, comprising: employing at least
one processor that executes the following acts; obtaining
identifying information related to a customer; identifying a
deposit product based at least in part upon a financial goal of the
customer; identifying an income guarantee vehicle based at least in
part upon the financial goal of the customer; establishing a
financial product that includes the income guarantee vehicle
combined with the deposit product; and guaranteeing a lifetime
income stream based at least in part upon the financial
product.
20. The computer-implemented method of claim 19, further comprising
identifying a financial goal of the customer, wherein the financial
goal is factored into the act of establishing the financial
product.
Description
CROSS-REFERENCE TO RELATED APPLICATIONS
[0001] This application is a Continuation of pending U.S. patent
application Ser. No. 12/235,897 entitled "LIFETIME FINANCIAL
PRODUCT" and filed Sep. 23, 2008. The entirety of the above-noted
application is incorporated by reference herein.
BACKGROUND
[0002] A certificate of deposit (CD) refers to a time (or term)
deposit which, most often, cannot be withdrawn (without penalty)
until the expiry of a designated period of time or `term.` CDs are
offered to customers by financial institutions such as banks,
credit unions, etc. During the term, the CD funds earn interest,
usually a higher interest rate than that available via conventional
savings accounts.
[0003] Similar to conventional savings accounts, CDs are insured by
the FDIC (Federal Deposit Insurance Corporation) or NCUA (National
Credit Union Administration), therefore, they are virtually
risk-free. The term of a CD can vary, for example, three months,
six months, one year, two years, up to 5 years or greater. During
the term, in exchange for agreeing to leave the money in the CD,
the customer is usually offered a higher fixed interest rate than
is available for monies available for withdrawal on-demand (e.g.,
savings accounts), although, adjustable rates are sometimes
available as well.
[0004] Today, there are many financial options available to
retirees as well as to those planning for retirement. While many
individuals employ conventional mechanisms such as interest-bearing
savings and mutual fund accounts, many have opted to use CDs to
assist in funding their retirement. Most often, individuals rely
upon the interest of CDs to fund their living expenses. In other
words, once a CD matures, the principal is often rolled into
another CD while the accrued interest becomes available living
expenses. As can be imagined, this cycle can continue and enable a
retiree to fund, or otherwise supplement, retirement expenses.
[0005] Unfortunately, this practice can be problematic for
individuals who cannot generate enough income for their basic
retirement living expenses or do not know how to manage their
savings to last their lifetime. They end-up in an attempt to insure
their own longevity by diligently shopping financial institutions
for the highest interest rate possible in attempt to maximize
income. This is also a problem for financial institutions. As will
be understood, this rate is not always available at the same
financial institution. Thus, money is often moved from bank to bank
throughout the cycle thereby reducing the `stickiness` (e.g.,
retention) of funds for the institution.
SUMMARY
[0006] The following presents a simplified summary of the
innovation in order to provide a basic understanding of some
aspects of the innovation. This summary is not an extensive
overview of the innovation. It is not intended to identify
key/critical elements of the innovation or to delineate the scope
of the innovation. Its sole purpose is to present some concepts of
the innovation in a simplified form as a prelude to the more
detailed description that is presented later.
[0007] The innovation disclosed and claimed herein, in one aspect
thereof, comprises a system and/or product (and corresponding
methodology) that employs a uniquely structured certificate of
deposit (CD) product to offer an individual guaranteed lifetime
income. In particular examples, the innovation couples a "payout"
CD with longevity insurance (or alternatively an annuity) to
effectively guarantee a lifetime stream of income. In accordance
therewith, systematic withdrawals can be taken from the CD over the
course of a customer's retirement years until the balance is
depleted. The amount of the systematic withdrawal may be designed
to remain the same, regardless of changes in interest rates upon
renewal of the CD. Upon balance depletion, the insurance continues
the established withdrawal payments for the remaining lifetime of
the customer. In the event the client takes an additional
withdrawal from the CD during the payout period, the guaranteed
withdrawal amount can be reduced accordingly.
[0008] In another aspect of the subject innovation the innovation
provides a financial vehicle by which a customer can generate
income for their lifetime through a uniquely designed financial
product. The product combines uniquely structured CD products with
longevity insurance to provide a customer with a lifetime payout.
Conventional CD products require customers to remain invested in
the CD until the end of the CD term (e.g., its "maturity"). In a
conventional CD, withdrawals occurring prior to maturity are
subject to an early withdrawal penalty. The "payout" CD product is
designed to generate systematic withdrawals during the CD term that
are exempt from early withdrawal penalties. Thus, customer's
financial security can be addressed by providing a lifetime stream
of income while, at the same time, increasing the `stickiness`
(e.g., retention) of money for financial institutions.
[0009] In yet another aspect thereof, a machine learning and
reasoning component is provided that employs a probabilistic and/or
statistical-based analysis to prognose or infer an action that a
user desires to be automatically performed.
[0010] To the accomplishment of the foregoing and related ends,
certain illustrative aspects of the innovation are described herein
in connection with the following description and the annexed
drawings. These aspects are indicative, however, of but a few of
the various ways in which the principles of the innovation can be
employed and the subject innovation is intended to include all such
aspects and their equivalents. Other advantages and novel features
of the innovation will become apparent from the following detailed
description of the innovation when considered in conjunction with
the drawings.
BRIEF DESCRIPTION OF THE DRAWINGS
[0011] FIG. 1 illustrates an example system that facilitates a
lifetime stream of income in accordance with an aspect of the
innovation.
[0012] FIG. 2 illustrates an example system that employs a user
interface to gather customer information in accordance with an
aspect of the innovation.
[0013] FIG. 3 illustrates an example analysis component in
accordance with an aspect of the innovation.
[0014] FIG. 4 illustrates an example lifetime certificate of
deposit (CD) product that guarantees a lifetime stream of income in
accordance with an aspect of the innovation.
[0015] FIG. 5 illustrates an example flow chart of procedures that
facilitate packaging a lifetime CD product in accordance with an
aspect of the innovation.
[0016] FIG. 6 illustrates a block diagram of a computer operable to
execute the disclosed architecture.
[0017] FIG. 7 illustrates a schematic block diagram of an exemplary
computing environment in accordance with the subject
innovation.
DETAILED DESCRIPTION
[0018] The innovation is now described with reference to the
drawings, wherein like reference numerals are used to refer to like
elements throughout. In the following description, for purposes of
explanation, numerous specific details are set forth in order to
provide a thorough understanding of the subject innovation. It may
be evident, however, that the innovation can be practiced without
these specific details. In other instances, well-known structures
and devices are shown in block diagram form in order to facilitate
describing the innovation.
[0019] As used in this application, the terms "component" and
"system" are intended to refer to a computer-related entity, either
hardware, a combination of hardware and software, software, or
software in execution. For example, a component can be, but is not
limited to being, a process running on a processor, a processor, an
object, an executable, a thread of execution, a program, and/or a
computer. By way of illustration, both an application running on a
server and the server can be a component. One or more components
can reside within a process and/or thread of execution, and a
component can be localized on one computer and/or distributed
between two or more computers.
[0020] As used herein, the term to "infer" or "inference" refer
generally to the process of reasoning about or inferring states of
the system, environment, and/or user from a set of observations as
captured via events and/or data. Inference can be employed to
identify a specific context or action, or can generate a
probability distribution over states, for example. The inference
can be probabilistic--that is, the computation of a probability
distribution over states of interest based on a consideration of
data and events. Inference can also refer to techniques employed
for composing higher-level events from a set of events and/or data.
Such inference results in the construction of new events or actions
from a set of observed events and/or stored event data, whether or
not the events are correlated in close temporal proximity, and
whether the events and data come from one or several event and data
sources.
[0021] As an introduction, the innovation can address financial
concerns of individuals, particularly, in their retirement years.
For instance, suppose a 67-year old retiree is trying to live on
Social Security payments supplemented solely with investment
earnings because she worries that she will outlive her retirement
funds. In this scenario, the retiree can purchase a Lifetime CD
(certificate of deposit) from a financial institution and begin to
receive an additional monthly payment almost immediately. In
accordance with the innovation, this additional payment can
continue throughout her lifetime. The retiree now feels confident
that she can cover her retirement living expenses. A longevity
policy (or other income guarantee vehicle) that is included in the
Lifetime CD will continue to provide her a stream of income long
after the CD is depleted.
[0022] Outliving retirement savings is a top concern for most
people entering retirement. By offering a guaranteed income
starting at a predetermined point in time, one of the biggest
unknowns can be taken out of the customer's retirement planning
strategy, namely how long their money should last. The innovation,
e.g., Lifetime CD product, combines this future income guarantee
with systematic withdrawals from a commonly used bank deposit
product, providing the client the ability to spend down their
retirement assets without running out of income.
[0023] As will be understood, managing retirement income offers a
significant opportunity for financial services firms. Although
firms are aggressively preparing for and pursuing the `Boomer`
opportunity, providers are aligning to serve the affluent segment,
leaving the mass affluent segments underserved.
[0024] In aspects, the Lifetime CD product of the innovation can
target the mass affluent market, a demographic with a heightened
need to manage retirement income. However, it is to be appreciated
that the Lifetime CD product may span across multiple market
segments as most people in a target age group (e.g., age 55 or
older) are most often familiar with certificates of deposit. Most
of the affluent investors and certainly the mass market investors
are likely to require downside protections and income generation
solutions to complement, or, in some cases replace traditional
solutions.
[0025] Research has shown that households with between $100,000 and
$500,000 in net worth hold 60% of their assets in bank products
such as CDs. CD penetration has been seen to be the highest (e.g.,
33%) among the affluent client base. The Lifetime CD will offer a
winning combination of a familiar product in a packaged solution,
reasonable pricing, and simplicity, obtained from a trusted
brand.
[0026] Referring initially to the drawings, FIG. 1 illustrates a
system 100 that facilitates generation of a lifetime deposit
product in accordance with aspects of the innovation. As
illustrated, the system 100 employs a revenue management system 102
to offer a lifetime financial product that is capable of
guaranteeing a stream of income throughout the life of a customer.
Essentially, the lifetime deposit product combines a deposit
product such as a certificate of deposit or CD together with an
insurance product such as longevity insurance.
[0027] The innovation offers a steady stream of dependable income
to retirees and other customers. In other words, the innovation
provides liquidity with the ability to withdraw additional funds at
any time, oftentimes subject to premature withdrawal penalty. By
doing so, the Lifetime CD overcomes one of the primary barriers
that prevent retirees from buying income annuities, loss of
control.
[0028] As described above, in a conventional sense, a CD refers to
a time (or term) deposit which, most often, cannot be withdrawn
without penalty until the expiry of a designated period of time or
`term.` CDs are offered to customers by financial institutions such
as banks, credit unions, etc. During the term, the CD funds earn
interest, usually a higher interest rate than that available via
conventional savings accounts. Unfortunately, the CD product does
not lend itself to use as an effective and/or efficient retirement
income planning mechanism. For at least this reason, the innovation
discloses a coupling of a deposit product (e.g., "payout" CD)
structured to accommodate systematic withdrawals with an insurance
product, for example, longevity insurance designed to guarantee the
continuation of these systematic withdrawals for the customer's
lifetime.
[0029] Longevity insurance essentially provides a manner by which a
policyholder can insure against financial ruin arising from
longevity. The policy is designed to pay to the policyholder a
benefit upon survival to a pre-established future age. Contrary to
other life annuity products, longevity insurance, as known in the
art, is a policy that is designed to pay out upon a policyholder
reaching much later years, for example, most often 80 or 85 years
of age.
[0030] By combining a payout CD together with an income guarantee
vehicle such as longevity insurance, the owner (or policyholder)
can be effectively guaranteed payment throughout their life
regardless of the availability of principal in the CD itself. In
other words, conventionally, many elderly people would use CDs in
an effort to fund their retirement years by living off the
principal and/or interest. Unfortunately, once the principal and/or
interest were exhausted, there were no additional monies
available.
[0031] Referring first to an aspect that combines an annuity with a
payout CD, it will be appreciated that, income annuities provide
protection against longevity risk by pooling the mortality risk of
everyone who purchases an annuity. Some annuity purchasers will die
before reaching their normal life expectancy, which offsets the
costs to the insurer of paying income to those who live longer than
their normal life expectancy. However, despite offering a
guaranteed income, no matter how long the purchaser may live, the
market for income annuities remains relatively small (e.g.,
accounted for $12 billion of the more than $212 billion in annuity
sales in 2005).
[0032] Conventional annuity products can be complex and inflexible.
Purchasing an annuity is not without risks--the purchaser loses
control of the assets upon annuitization and the annuity premium
may be forfeited to the insurer upon death. Plus, the purchaser is
exposed to credit risk from contracting with a single insurer.
[0033] Similarly, longevity insurance provides another option to
obtain guaranteed income, typically starting after age 80-85, in
exchange for an initial investment made some 20 years earlier. A
basic, and traditional, longevity insurance product has no death
benefit, inflation adjustment or withdrawal options.
[0034] For both income annuities and longevity insurance, the terms
of the financial product contracts that would offer the guarantees
investors find attractive require that investors give up control
over their wealth. With the Lifetime CD, retirees will always have
control over funds held in the CD, and in lieu of a one-time up
front premium payment for longevity protection, the Lifetime CD
spreads the cost over the term of the CD withdrawals. More
particularly, the innovation describes combination of a payout CD
with an insurance product, such as an annuity or longevity
insurance policy.
[0035] In aspects, the Lifetime CD offers a simple solution for
managing financial risks, specifically, longevity, market and
potentially inflation risks, in retirement through a combination of
a group insurance policy and a bank deposit product. The bank
product can be an automatically renewable CD (e.g., payout CD) that
supports systematic withdrawals of principal in an amount
anticipated to deplete the account balance at age 85 (or other
specified age). In embodiments, the rate period may use a series of
rate renewals (e.g., 5 year rate guarantee) or may include a single
rate term. The systematic withdrawal rate will be set based on
factors such as the initial interest rate, and the client's age.
Interest is most often also distributed with the systematic
withdrawal. Interest accrued but not paid is added to the balance
until distributed in later years. The interest rate can be adjusted
for ongoing payment of a fee (e.g., insurance premium) to guarantee
continuation of payments once the CD balance is exhausted.
Alternatively, ongoing fee payments can be deducted from the
balance of the CD or another account.
[0036] In one example, the financial institution can own the
"longevity policy" that provides the lifetime income guarantee. In
other examples, the customer can own the policy. The policy will
likely be underwritten by a third party. In yet another example,
the insurance can be funded by the financial institution. Some
benefits of the Lifetime CD are listed below: [0037] Overcomes many
of the barriers that prevent retirees from buying income
annuities--such as complexity and loss of control. [0038] Offers
steady stream of dependable income. [0039] Allows retiree to spend
down principal to maximize lifestyle without fear of outliving
their retirement savings. [0040] Provides liquidity with ability to
withdraw funds at any time, subject to a premature withdrawal
penalty. [0041] Offers FDIC protection on covered balances in the
CD. [0042] Delivers better financial management for retirees,
providing a better living standard to those who would be hesitant
to spend down principal otherwise.
[0043] The Lifetime CD can be right for people who need a monthly
income, just as they had when they were working. It would also
appeal to people who fear they lack the financial expertise to make
their savings last a lifetime. The Lifetime CD can help people cope
financially with several risks--longevity, market risk, and,
potentially, inflation. The payment structure also helps add
financial discipline to curb the risk of overspending for retirees
who may find it difficult to resist the urge to dip into the nest
egg and withdraw too much too early. In the event of a joint CD
(e.g., husband and wife), adjustments may be made (for example,
systematic payments may be lower or the insurance premium may be
increased) to accommodate guaranteed lifetime withdrawals covering
both spouses.
[0044] In accordance with the innovation described herein, a
packaging component 104 can be employed to combine a deposit
product 106 together with longevity insurance 108 based upon a
customer's needs, desires or preferences. This combination
guarantees payment to a customer throughout existence. In
operation, the packaging component 104 can be employed to calculate
an installment payment rate or amount (or annuity) based upon a
number of factors, including but not limited to, initial CD
principal, applicable CD interest rate, age of customer, life
expectancy, etc. Additionally, the packaging component 104 can also
be used to identify an appropriate longevity insurance policy or
other product that triggers to continue the payments upon depletion
of CD funds. Additionally, by design, the longevity insurance will
be designed to trigger upon the policyholder either depleting their
CD balance through the allowable systematic withdrawals or reaching
a pre-defined age, e.g., 80 or 85. It is to be understood that the
point at which the longevity insurance (or annuity) kicks in will
vary. The payout rate used to calculate the amount of systematic
withdrawals may be based on the initial interest rate and
systematic withdrawals will continue at that rate regardless of how
interest rates change over time. Thus, it will be appreciated that
there may be no pre-defined age for the insurance to take over.
However, the initial payout rate will be set based on assumptions
regarding the overall duration of the CD.
[0045] With regard to a longevity insurance policy, the benefit is
most often paid in the form of an installment or annuity for the
remainder of the policyholder's life. However, it is to be
understood that, alternative payment types and schedules can be
provided in accordance with the terms of a specific policy. These
alternative aspects are to be included within the scope of this
innovation and claims appended hereto. Essentially, the innovation
can be viewed as a mechanism by which retirees can hedge
economically against living to an age at which they may have
diminished financial resources.
[0046] Turning now to FIG. 2, a block diagram of an example
packaging component 102 is shown in accordance with aspects of the
innovation. As shown, packaging component 102 can include an
analysis component 202, a deposit product identification component
204 and an insurance identification component 206. Together, these
sub-components (202, 204, 206) enable configuration of a financial
product that can effectively protect the financial viability of a
customer, for example, an elderly individual.
[0047] In operation, a user interface (UI) 208 can be employed to
provide an input mechanism by which a user (e.g., customer,
financial planner . . . ) can enter information. This information
can be in response to a long-term goal questionnaire or the like.
Additionally, the UI can be employed to provide a mechanism by
which a user can prompt establishment of a lifetime financial
product. Additionally, or alternatively, the information can be
retrieved from a store 210, application (not shown) or other
suitable input mechanism. In all, the information can be processed
by the analysis component 202 together with the deposit product and
insurance identification components (204, 206) to establish a
lifetime financial product offering.
[0048] Once established, in the event that the customer opts to
accept the offering, the product can provide lifetime installment
(or annuity) payments to the customer. As described above, the
customer would commit a principal amount into an applicable CD
product. The CD will have pre-assigned or negotiated interest rate
of return that may be tied to a specified market index.
Additionally, a longevity insurance policy can be coupled to the
backend of the CD such that, once the CD funds are depleted, the
insurance policy will trigger to provide the policyholder with a
lifetime benefit equal to (or substantially equal to) the CD
installment payments. While the examples described herein are
directed to a single deposit product, it is to be understood that
the features, functions and benefits can leverage a `laddering`
technique of deposit products without departing from the spirit
and/or scope of the innovation and claims appended hereto.
[0049] Additionally, it is to be understood that alternative
payment amounts can be structured in accordance with the CD and/or
insurance policy. As well, the frequency of payments can fluctuate
as desired, pre-determined or negotiated. Still further, payment
amounts can fluctuate from payment to payment based upon a product
feature or a customer need, desire or the like. Regardless of the
amount or frequency of the payments, the overall features,
functions and benefits of the innovation are such that, once the CD
funds are depleted, the insurance benefit is triggered to continue
payment throughout the life of the individual.
[0050] As well, cost of living and inflation factors can be
considered in calculating applicable parameters (e.g., rate of
return, premium amount, frequency of payment, amount of payment . .
. ). Additionally, the analysis component 202 can evaluate and
otherwise factor in parameters including, but not limited to, life
expectancy, mortality, lapse rate, administrative costs, interest
rate trends, etc. These alternative aspects are to be considered
within the scope of the innovation and claims appended hereto. FIG.
3 illustrates an example analysis component 202 that incorporates
these factors.
[0051] As shown in FIG. 3, analysis component 202 can include a
calculation component 302, an inflation projection component 304
and a cost of living projection component 306. Additionally, and
optionally, the analysis component 202 can include a machine
learning and reasoning (MLR) component 308 that is capable of
automating one or more features as described herein.
[0052] The calculation component 302 can effectively include logic
that is capable of establishing specifications for products based
upon information received from a user, customer, candidate,
application, store, etc. For instance, the calculation component
302 can be used to establish applicable principal amount(s),
installment amount(s) and frequency, etc. based upon a customer's
desire or preference. In particular examples, the calculation
component 302 can consider a customer's age, health, relationship
with the financial institution, account status, or the like in
establishing product parameters.
[0053] The inflation and/or cost of living projection components
(304, 306) facilitate financial projections that permit
compensation for economic changes and/or fluctuations. Essentially,
the components (304, 306) can access and evaluate economic
information and standards thereby establishing potential
compensation factors. The factors can be employed to set, modify or
otherwise adjust installment amounts, frequency, etc. associated
with the features, functions and benefits of the innovation.
[0054] FIG. 3 also illustrates that analysis component 202 can
include an MLR component 308 which facilitates automating one or
more features in accordance with the subject innovation. The
subject innovation (e.g., installment amount modification,
frequency . . . ) can employ various MLR-based schemes for carrying
out various aspects thereof. For example, a process for determining
when/if to increase/decrease a frequency amount can be facilitated
via an automatic classifier system and process.
[0055] A classifier is a function that maps an input attribute
vector, x=(x1, x2, x3, x4, xn), to a confidence that the input
belongs to a class, that is, f(x)=confidence(class). Such
classification can employ a probabilistic and/or statistical-based
analysis (e.g., factoring into the analysis utilities and costs) to
prognose or infer an action that a user desires to be automatically
performed.
[0056] A support vector machine (SVM) is an example of a classifier
that can be employed. The SVM operates by finding a hypersurface in
the space of possible inputs, which the hypersurface attempts to
split the triggering criteria from the non-triggering events.
Intuitively, this makes the classification correct for testing data
that is near, but not identical to training data. Other directed
and undirected model classification approaches include, e.g., naove
Bayes, Bayesian networks, decision trees, neural networks, fuzzy
logic models, and probabilistic classification models providing
different patterns of independence can be employed. Classification
as used herein also is inclusive of statistical regression that is
utilized to develop models of priority.
[0057] As will be readily appreciated from the subject
specification, the subject innovation can employ classifiers that
are explicitly trained (e.g., via a generic training data) as well
as implicitly trained (e.g., via observing user behavior, receiving
extrinsic information). For example, SVM's are configured via a
learning or training phase within a classifier constructor and
feature selection module. Thus, the classifier(s) can be used to
automatically learn and perform a number of functions, including
but not limited to determining according to a predetermined
criteria when/if to increase or decrease an installment amount,
when/if to increase or decrease installment frequency, etc.
[0058] FIG. 4 illustrates an example graphical illustration of the
lifetime deposit product (e.g., lifetime CD) in accordance with the
innovation. Essentially, FIG. 4 graphically illustrates that a CD
can be combined with longevity insurance to effectuate a lifetime
CD. In accordance with the features, functions and benefits of the
innovation, the lifetime CD product can provide a stream of income
to an individual throughout their lifetime. It will be appreciated
that payments can be made by the financial institution, insurance
company, third party or any combination thereof without departing
from the scope of the innovation described herein.
[0059] In operation, the CD can provide periodic payments (e.g.,
installments, annuities) before, during and after a balance of the
CD is depleted. In other words, periodic installments can be
provided in accordance with a determined (or inferred) amount and
frequency until the total value (e.g., principal and interest) of
the CD is exhausted. Once exhausted, a periodic payout can be paid
in accordance with the terms of the applicable longevity insurance
policy. It is to be understood that these payments can be the same
or different in amount and frequency as those paid under the CD.
Essentially, the terms of the longevity insurance can be used to
set payment parameters post-CD.
[0060] FIG. 5 illustrates a methodology of establishing a lifetime
deposit product in accordance with an aspect of the innovation.
While, for purposes of simplicity of explanation, the one or more
methodologies shown herein, e.g., in the form of a flow chart, are
shown and described as a series of acts, it is to be understood and
appreciated that the subject innovation is not limited by the order
of acts, as some acts may, in accordance with the innovation, occur
in a different order and/or concurrently with other acts from that
shown and described herein. For example, those skilled in the art
will understand and appreciate that a methodology could
alternatively be represented as a series of interrelated states or
events, such as in a state diagram. Moreover, not all illustrated
acts may be required to implement a methodology in accordance with
the innovation.
[0061] At 502, a customer is identified, for example, a retiree or
pre-retiree who would most likely fit the target class for a
lifetime deposit product. It will be understood that historical
data can be used to identify a customer. For instance, surveys can
be conducted to identify individuals that conventionally used CDs
to fund retirement and income in their later years. As described
above, many customers that originally used CDs as a retirement
investment (e.g., who live off the interest) often engage in rate
shopping when their CDs reached maturity. This rate shopping
decreased the `stickiness` of money for financial institutions.
Thus, the innovation, by providing an incentive of lifetime
payments, can increase the `stickiness` of money for financial
institutions. Effectively, the innovation can shift the focus of
CDs from a short-term `investment` to a vehicle to produce
retirement income for the rest of their life.
[0062] Information that identifies the customer can be gathered at
504. Here, a UI or other information gathering technique can be
employed to gather data. In other aspects, financial institution
records can be employed to provide data related to an existing
customer. Data can include, but is not limited to, name, age,
identification numbers, account(s), length of patronage, cost of
living, profitability, credit worthiness, outstanding debts,
etc.
[0063] The customer's goals can be gathered at 506. Here,
information can be gathered that identifies factors that can
contribute to determination of installment amount, frequency, etc.
A decision is made at 508 to determine if the customer fits the
demographic for a Lifetime CD product. If not, the methodology
returns to 502 to identify another customer.
[0064] However, if the customer fits the target group, at 510, a
deposit product or product bundle can be identified that fits the
customer based upon age, desires, and other goal factors. It is to
be understood that, in aspects the financial institution may
require an account be opened, e.g., a checking account to be used
in depositing systematic withdrawals from the lifetime CD. For
instance, for a customer that is currently 68 years of age, a CD
duration of 12 to 17 years (or even 20 years) may be appropriate.
For another customer who is 70 years of age, a 10 to 15 year CD
duration may be appropriate. In either case, the final CD term will
expire when the account balance is exhausted or reaches a
pre-determined minimum amount, at which time longevity insurance
can take over. While many of the examples described herein are
triggered and reliant upon a single individual's life (and age), it
is to be understood that more complex products (e.g., Joint
Lifetime CDs) can be provided which correspond to additional
individuals lives. Most often, these products will adjust insurance
policy premiums or withdrawal amounts based upon the ages of the
contracting parties. These alternative products are to be included
within the scope of this disclosure and claims appended hereto.
[0065] At 512, the deposit product or CD is coupled to an
appropriate insurance product, for example, longevity insurance. It
will be understood that standard insurance underwriting practices
can be employed to select and attach an applicable insurance
product. As described supra, once the value of the CD is depleted,
the insurance can trigger to provide payments or installments
throughout the customer's living existence. It will be understood
that, if desired, riders can be employed to compensate for factors
such as, but not limited to, cost of living increases or inflation
protection.
[0066] In alternative aspects, the customer can purchase the
longevity product in conjunction with, but separate from, the CD.
Here, the longevity insurance can be packaged to the CD but,
provided by a third party insurance company. In another example, a
financial institution can independently secure or guarantee the
lifetime stream of income. Still further, it is possible for the
financial institution to guarantee the stream of income with the
customer while insuring the funds itself with a third party
insurance company.
[0067] Referring now to FIG. 6, there is illustrated a block
diagram of a computer operable to execute the disclosed
architecture. In order to provide additional context for various
aspects of the subject innovation, FIG. 6 and the following
discussion are intended to provide a brief, general description of
a suitable computing environment 600 in which the various aspects
of the innovation can be implemented. While the innovation has been
described above in the general context of computer-executable
instructions that may run on one or more computers, those skilled
in the art will recognize that the innovation also can be
implemented in combination with other program modules and/or as a
combination of hardware and software.
[0068] Generally, program modules include routines, programs,
components, data structures, etc., that perform particular tasks or
implement particular abstract data types. Moreover, those skilled
in the art will appreciate that the inventive methods can be
practiced with other computer system configurations, including
single-processor or multiprocessor computer systems, minicomputers,
mainframe computers, as well as personal computers, hand-held
computing devices, microprocessor-based or programmable consumer
electronics, and the like, each of which can be operatively coupled
to one or more associated devices.
[0069] The illustrated aspects of the innovation may also be
practiced in distributed computing environments where certain tasks
are performed by remote processing devices that are linked through
a communications network. In a distributed computing environment,
program modules can be located in both local and remote memory
storage devices.
[0070] A computer typically includes a variety of computer-readable
media. Computer-readable media can be any available media that can
be accessed by the computer and includes both volatile and
nonvolatile media, removable and non-removable media. By way of
example, and not limitation, computer-readable media can comprise
computer storage media and communication media. Computer storage
media includes both volatile and nonvolatile, removable and
non-removable media implemented in any method or technology for
storage of information such as computer-readable instructions, data
structures, program modules or other data. Computer storage media
includes, but is not limited to, RAM, ROM, EEPROM, flash memory or
other memory technology, CD-ROM, digital versatile disk (DVD) or
other optical disk storage, magnetic cassettes, magnetic tape,
magnetic disk storage or other magnetic storage devices, or any
other medium which can be used to store the desired information and
which can be accessed by the computer.
[0071] Communication media typically embodies computer-readable
instructions, data structures, program modules or other data in a
modulated data signal such as a carrier wave or other transport
mechanism, and includes any information delivery media. The term
"modulated data signal" means a signal that has one or more of its
characteristics set or changed in such a manner as to encode
information in the signal. By way of example, and not limitation,
communication media includes wired media such as a wired network or
direct-wired connection, and wireless media such as acoustic, RF,
infrared and other wireless media. Combinations of the any of the
above should also be included within the scope of computer-readable
media.
[0072] With reference again to FIG. 6, the exemplary environment
600 for implementing various aspects of the innovation includes a
computer 602, the computer 602 including a processing unit 604, a
system memory 606 and a system bus 608. The system bus 608 couples
system components including, but not limited to, the system memory
606 to the processing unit 604. The processing unit 604 can be any
of various commercially available processors. Dual microprocessors
and other multi-processor architectures may also be employed as the
processing unit 604.
[0073] The system bus 608 can be any of several types of bus
structure that may further interconnect to a memory bus (with or
without a memory controller), a peripheral bus, and a local bus
using any of a variety of commercially available bus architectures.
The system memory 606 includes read-only memory (ROM) 610 and
random access memory (RAM) 612. A basic input/output system (BIOS)
is stored in a non-volatile memory 610 such as ROM, EPROM, EEPROM,
which BIOS contains the basic routines that help to transfer
information between elements within the computer 602, such as
during start-up. The RAM 612 can also include a high-speed RAM such
as static RAM for caching data.
[0074] The computer 602 further includes an internal hard disk
drive (HDD) 614 (e.g., EIDE, SATA), which internal hard disk drive
614 may also be configured for external use in a suitable chassis
(not shown), a magnetic floppy disk drive (FDD) 616, (e.g., to read
from or write to a removable diskette 618) and an optical disk
drive 620, (e.g., reading a CD-ROM disk 622 or, to read from or
write to other high capacity optical media such as the DVD). The
hard disk drive 614, magnetic disk drive 616 and optical disk drive
620 can be connected to the system bus 608 by a hard disk drive
interface 624, a magnetic disk drive interface 626 and an optical
drive interface 628, respectively. The interface 624 for external
drive implementations includes at least one or both of Universal
Serial Bus (USB) and IEEE 1394 interface technologies. Other
external drive connection technologies are within contemplation of
the subject innovation.
[0075] The drives and their associated computer-readable media
provide nonvolatile storage of data, data structures,
computer-executable instructions, and so forth. For the computer
602, the drives and media accommodate the storage of any data in a
suitable digital format. Although the description of
computer-readable media above refers to a HDD, a removable magnetic
diskette, and a removable optical media such as a CD or DVD, it
should be appreciated by those skilled in the art that other types
of media which are readable by a computer, such as zip drives,
magnetic cassettes, flash memory cards, cartridges, and the like,
may also be used in the exemplary operating environment, and
further, that any such media may contain computer-executable
instructions for performing the methods of the innovation.
[0076] A number of program modules can be stored in the drives and
RAM 612, including an operating system 630, one or more application
programs 632, other program modules 634 and program data 636. All
or portions of the operating system, applications, modules, and/or
data can also be cached in the RAM 612. It is appreciated that the
innovation can be implemented with various commercially available
operating systems or combinations of operating systems.
[0077] A user can enter commands and information into the computer
602 through one or more wired/wireless input devices, e.g., a
keyboard 638 and a pointing device, such as a mouse 640. Other
input devices (not shown) may include a microphone, an IR remote
control, a joystick, a game pad, a stylus pen, touch screen, or the
like. These and other input devices are often connected to the
processing unit 604 through an input device interface 642 that is
coupled to the system bus 608, but can be connected by other
interfaces, such as a parallel port, an IEEE 1394 serial port, a
game port, a USB port, an IR interface, etc.
[0078] A monitor 644 or other type of display device is also
connected to the system bus 608 via an interface, such as a video
adapter 646. In addition to the monitor 644, a computer typically
includes other peripheral output devices (not shown), such as
speakers, printers, etc.
[0079] The computer 602 may operate in a networked environment
using logical connections via wired and/or wireless communications
to one or more remote computers, such as a remote computer(s) 648.
The remote computer(s) 648 can be a workstation, a server computer,
a router, a personal computer, portable computer,
microprocessor-based entertainment appliance, a peer device or
other common network node, and typically includes many or all of
the elements described relative to the computer 602, although, for
purposes of brevity, only a memory/storage device 650 is
illustrated. The logical connections depicted include
wired/wireless connectivity to a local area network (LAN) 652
and/or larger networks, e.g., a wide area network (WAN) 654. Such
LAN and WAN networking environments are commonplace in offices and
companies, and facilitate enterprise-wide computer networks, such
as intranets, all of which may connect to a global communications
network, e.g., the Internet.
[0080] When used in a LAN networking environment, the computer 602
is connected to the local network 652 through a wired and/or
wireless communication network interface or adapter 656. The
adapter 656 may facilitate wired or wireless communication to the
LAN 652, which may also include a wireless access point disposed
thereon for communicating with the wireless adapter 656.
[0081] When used in a WAN networking environment, the computer 602
can include a modem 658, or is connected to a communications server
on the WAN 654, or has other means for establishing communications
over the WAN 654, such as by way of the Internet. The modem 658,
which can be internal or external and a wired or wireless device,
is connected to the system bus 608 via the serial port interface
642. In a networked environment, program modules depicted relative
to the computer 602, or portions thereof, can be stored in the
remote memory/storage device 650. It will be appreciated that the
network connections shown are exemplary and other means of
establishing a communications link between the computers can be
used.
[0082] The computer 602 is operable to communicate with any
wireless devices or entities operatively disposed in wireless
communication, e.g., a printer, scanner, desktop and/or portable
computer, portable data assistant, communications satellite, any
piece of equipment or location associated with a wirelessly
detectable tag (e.g., a kiosk, news stand, restroom), and
telephone. This includes at least Wi-Fi and Bluetooth.TM. wireless
technologies. Thus, the communication can be a predefined structure
as with a conventional network or simply an ad hoc communication
between at least two devices.
[0083] Wi-Fi, or Wireless Fidelity, allows connection to the
Internet from a couch at home, a bed in a hotel room, or a
conference room at work, without wires. Wi-Fi is a wireless
technology similar to that used in a cell phone that enables such
devices, e.g., computers, to send and receive data indoors and out;
anywhere within the range of a base station. Wi-Fi networks use
radio technologies called IEEE 802.11 (a, b, g, etc.) to provide
secure, reliable, fast wireless connectivity. A Wi-Fi network can
be used to connect computers to each other, to the Internet, and to
wired networks (which use IEEE 802.3 or Ethernet). Wi-Fi networks
operate in the unlicensed 2.4 and 5 GHz radio bands, at an 11 Mbps
(802.11a) or 54 Mbps (802.11b) data rate, for example, or with
products that contain both bands (dual band), so the networks can
provide real-world performance similar to the basic 10BaseT wired
Ethernet networks used in many offices.
[0084] Referring now to FIG. 7, there is illustrated a schematic
block diagram of an exemplary computing environment 700 in
accordance with the subject innovation. The system 700 includes one
or more client(s) 702. The client(s) 702 can be hardware and/or
software (e.g., threads, processes, computing devices). The
client(s) 702 can house cookie(s) and/or associated contextual
information by employing the innovation, for example.
[0085] The system 700 also includes one or more server(s) 704. The
server(s) 704 can also be hardware and/or software (e.g., threads,
processes, computing devices). The servers 704 can house threads to
perform transformations by employing the innovation, for example.
One possible communication between a client 702 and a server 704
can be in the form of a data packet adapted to be transmitted
between two or more computer processes. The data packet may include
a cookie and/or associated contextual information, for example. The
system 700 includes a communication framework 706 (e.g., a global
communication network such as the Internet) that can be employed to
facilitate communications between the client(s) 702 and the
server(s) 704.
[0086] Communications can be facilitated via a wired (including
optical fiber) and/or wireless technology. The client(s) 702 are
operatively connected to one or more client data store(s) 708 that
can be employed to store information local to the client(s) 702
(e.g., cookie(s) and/or associated contextual information).
Similarly, the server(s) 704 are operatively connected to one or
more server data store(s) 710 that can be employed to store
information local to the servers 704.
[0087] What has been described above includes examples of the
innovation. It is, of course, not possible to describe every
conceivable combination of components or methodologies for purposes
of describing the subject innovation, but one of ordinary skill in
the art may recognize that many further combinations and
permutations of the innovation are possible. Accordingly, the
innovation is intended to embrace all such alterations,
modifications and variations that fall within the spirit and scope
of the appended claims. Furthermore, to the extent that the term
"includes" is used in either the detailed description or the
claims, such term is intended to be inclusive in a manner similar
to the term "comprising" as "comprising" is interpreted when
employed as a transitional word in a claim.
* * * * *