Method and system for establishing, monitoring, and reserving a guaranteed minimum value return on select investments

Abstract

The present invention provides a method and system for assuring a minimal guaranteed return on long-term investments, such as mutual funds or variable annuities. The invention includes a method and system for pricing, administration, customer presentation, and reserving relating to the guaranteed minimum return assurance. In addition, the present invention includes a method and system for allowing individual investors to control and easily change their typical asset allocation strategies. In order to accomplish the minimum guaranteed return, the present invention also includes sophisticated projection techniques, such as Monte Carlo simulation of investment performance. The present invention also includes features that allow the tracking of payments and removal of overcontributions from selected accounts, use of reserving techniques, optimizing investment diversification, proposal, issue, and administration of variable annuity riders, such as guaranteed minimum variable income benefit riders and guaranteed minimum income benefit riders, linkable to guaranteed minimum death benefits, and establish a charge for the guarantee.

Description

FIELD OF THE INVENTION[0001]The present invention relates to a method and system for providing a minimal guaranteed return on a long-term investment and the pricing, administration, customer presentation, and reserving for this minimum guarantee. In particular, the present invention relates to a method and system for allowing individual investors to control and change easily their typical asset allocation strategies. In addition, the present invention relates to a system that allows guarantee of minimum return using sophisticated projection techniques. In accomplishing this minimum guarantee, the present invention includes a methodology for diversifying retirement investment, particularly using mutual fund and variable annuity separate account fund investments, variable annuity riders, and a predetermined guarantee charge.BACKGROUND OF THE INVENTION[0002]As a client approaches “middle age” (generally 45 to 60 years of age), asset allocation recommendations for long-term investments ...

AI Technical Summary

Benefits of technology

[0011]It is a further object of the present invention to protect financial institutions that provide the guarantee by establishing a mechanism that insures investment diversification, which minimizes the possibility of poor long term investment results.

[0023]It is a further object of the present invention to allow for the creation of a major new individual investor benefit that provides substantial investment guarantees on mutual funds and VA separate account funds. It is an object of the present invention to provide individual investors with the ability to maximize their retirement savings and retirement benefit returns while maintaining a high safe guaranteed minimum return for their retirement savings and income.

Problems solved by technology

No existing system provides a minimum guaranteed annual return, such as 5%, on a long term investment of mutual funds or separate accounts within variable annuities.

Further, existing art does not provide sophisticated projection and modeling techniques, such as Monte Carlo simulation to assist with assuring a guaranteed annual return.

Halley, et al., does not contain a method and system for guaranteeing a higher rate of return than typically provided by Federally backed securities.

It does not contain sophisticated modeling techniques such as Monte Carlo simulation to provide projections of fund performance.

It does not allow investor control and modification of investment selections.

It does not provide a method and system for diversification guidance.

Champion, et al., does not contain a method and system for guaranteeing a high rate of return for individual investors.

It does not contain sophisticated modeling techniques such as Monte Carlo simulation to provide projections of fund performance.

It does not provide a method and system for diversification guidance.

Wolfberg, et al., does not contain a method and system for guaranteeing a high rate of return for individual investors using sophisticated modeling techniques such as Monte Carlo simulation to project fund performance.

It does not provide a method and system for diversification guidance.

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