Survivor benefit plan, method and computer program product for providing a survivor income-replacement plan that is adjusted for inflation

摘要

A method and computer program product for providing survivor income-replacement benefits having a guaranteed rate of interest with the possibility of a higher income stream to the designated survivor if supported by prevailing interest rates at the time of annuitization. In one embodiment, the insured would purchase either a fixed level dollar amount of monthly income for a fixed period of time or a Cost of Living Adjusted (COLA) benefit in the form of a monthly annuity. The insurance carrier is required to contractually guarantee a minimum rate of interest, e.g., 3% at the time of annuitization. The insurance carrier is further required to apply the same discount rate to the annuity contract that is provided to the best commercially available immediate annuity contract the carrier offers at the time of annuitization, subject to the minimum guaranteed rate of interest. Thus, the beneficiary may receive an increased income stream if the relevant interest rate at the time of the purchaser's death exceeds the guaranteed minimum interest rate. Thus, if the insured purchased a survivor benefit under the inventive method with a 3% guaranteed minimum COLA, and if the best commercially available immediate annuity interest rate is 6%, the benefit paid the beneficiary survivor is increased annually at a rate of 6%. Without COLA, the contract simply starts paying higher level monthly benefits based on the higher 6% discount rate.