System and method for creating a retirement plan funded with a variable life insurance policy and/or a variable annuity policy

a life insurance policy and variable annuity technology, applied in the field of system and method for creating a retirement plan funded with a variable life insurance policy and/or a variable annuity policy, can solve the problems of limited upside performance, impaired consumer demand for whole life contracts, and limited upside performan

Inactive Publication Date: 2006-04-13
KORESKO JOHN J V
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  • Summary
  • Abstract
  • Description
  • Claims
  • Application Information

AI Technical Summary

Problems solved by technology

Generally, although such contracts have a guaranteed rate of return (usually 4.5% per annum or less), the potential upside investment performance is very limited because of conservative investments made by insurance companies.
Limited upside performance has impaired consumer demand for whole life contracts, in general; and this has also impaired demand for 412(i) plans.
However, the conventional belief is that one cannot use a variable life insurance policy and / or a variable annuity policy to fund a 412(i) defined benefit plan.

Method used

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  • System and method for creating a retirement plan funded with a variable life insurance policy and/or a variable annuity policy
  • System and method for creating a retirement plan funded with a variable life insurance policy and/or a variable annuity policy
  • System and method for creating a retirement plan funded with a variable life insurance policy and/or a variable annuity policy

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Experimental program
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Embodiment Construction

[0025] I. Overview of the Present Invention

[0026] The present invention provides a mechanism to avoid violation of the “incidental benefit rule,” an Internal Revenue Service rule that denies qualified treatment to a defined benefit plan which provides life insurance in other than incidental amounts. The present invention does this by negating a policy option that may be ordinarily elected by a participant covered by the policy or plan fiduciary, under which the excess (if any) of the policy's cash value over the “tabular cash value” (essentially the net level premium reserve on a regular whole life policy having the same face amount and the same net premium as the policy) is added to the policy's face amount, with the total becoming the death benefit payable under the policy.

[0027] The present invention differs from a process based upon traditional ordinary whole life insurance policy only in that the policy employed in the process generally does not contain guaranteed (i.e., cont...

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PUM

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Abstract

A retirement plan is created using variable life insurance contracts and / or variable annuity contracts. Actuarial data used to create the retirement plan is entered via at least one user interface and processed. Based on the actuarial data, a variable life insurance policy and / or a variable annuity policy is generated for the purpose of funding the retirement plan. Additionally, a separate agreement is created that either extra-contractually modifies the variable life insurance policy and / or the variable annuity policy, or defines the terms under which the variable life insurance policy and / or the variable annuity policy is to be used in the retirement plan.

Description

CROSS-REFERENCE TO RELATED APPLICATION [0001] This application is a divisional of copending U.S. application Ser. No. 10 / 086,924 filed Feb. 28, 2002, the entire disclosure of which is incorporated herein by reference. [0002] This application claims the benefit of U.S. Provisional Application No. 60 / 296,173, filed Jun. 6, 2001, entitled “System and Method for Creating a Defined Benefit Pension Plan Funded With Variable Life Insurance and Generating a Policy Thereof.”BACKGROUND OF THE INVENTION [0003] Internal Revenue Code Section 412(i) covers defined benefit plans that are funded solely by annuity contracts and / or insurance contracts, including retirement income endowment contracts. A defined benefit plan is a retirement plan sponsored by an employer, such as a pension plan, in which a retired employee receives a specific monetary disbursement based on salary history and years of service, or both. A 412(i) plan is a defined benefit plan wherein the funding (annual contribution) is c...

Claims

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Application Information

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Patent Type & Authority Applications(United States)
IPC IPC(8): G06Q10/00G06Q40/08G06Q50/22
CPCG06Q40/00G06Q40/02G06Q40/08G06Q50/22G06Q40/10
Inventor KORESKO, JOHN J.V
Owner KORESKO JOHN J V
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