Life insurance with price indexation function

Abstract

To solve the problem that, even though a large number of life insurance companies are currently developing and selling a variety of insurance products, resulting in the total number of insurance product types in excess of 1000, not a single insurance product pays insurance benefits in anticipation of future price increases during extremely long contract periods, causing anxiety and disadvantages to policy holders regarding inflation risks.SOLUTION: Life insurance products with price indexation functions designed to link insurance benefits to macroeconomic indicators such as the consumer price index is provided, where the products concerned are life insurance, medical insurance, pension insurance, and other insurance products with lifelong or similarly long-term coverage periods.SELECTED DRAWING: Figure 1

Description

Field of the Invention

[0001] The present invention relates to a life insurance with a price slide function, which provides a price slide function for the insurance money of life insurance.

Background Art

[0002] Conventionally, life insurance, whether it is for death protection, medical protection, or personal annuity for old-age life protection, has a common purpose of subscribing, which is to ensure "preparation for emergencies" and "peace of mind for the future". There are various life insurance products, and most of them have a long contract period. In particular, whole life insurance has a lifetime contract period, so the period from the start to the end of the contract may be 50 years, 60 years, 70 years, or more. Although prices rise and fall in short cycles of 10 years or 20 years, it has been historically proven that prices will surely rise in long cycles of half a century or a century. It is easy to predict that prices will be different from 50 years ago and will also be different between now and 50 years later. The public pension system that supports the lives of the people attaches importance to the obvious fact that when prices rise, the lives of the elderly become difficult and the survival of the elderly is threatened, and has provided a price slide function for the benefit amount. On the other hand, although private life insurance is a professional that advises and consults the public on "preparation for the future" and "life plan", there is not a single insurance product that provides a price slide function for the insurance money that can be received when the benefit event occurs in the current era (the first quarter of the 21st century).

Prior Art Documents

Patent Documents

[0003]

Summary of the Invention

Problems to be Solved by the Invention

[0004] This had the following drawbacks. Currently, although many life insurance companies develop and sell a wide variety of insurance products and the total number of insurance products exceeds 1,000, there is not a single insurance product that pays benefits assuming future price increases over an extremely long contract period. This poses the problem of the anxiety and disadvantage of insurance policyholders against inflation risk.

[0005] 1. In the short term, prices rise and fall repeatedly in the context of changes in the economic situation and business trends. However, in the long term, prices have been on an absolute upward trend throughout history. It is a theorem that prices continue to rise fundamentally. Since rising prices mean a decline in the value of money, any contract with a long time lag until fulfillment will inevitably result in one of the parties suffering a financial loss. 2. For example, if a policyholder or insured person who joined a whole life insurance policy on the occasion of their coming-of-age ceremony dies at the age of 90, the insurance benefit received will be an appropriate amount if there has been no economic growth for 70 years. However, if there has been economic growth, prices have risen, and the value of money has declined, it should be considered that the benefit will be significantly less than the amount originally expected as insurance. Although a sufficient amount necessary to fulfill the function of insurance was set and the contract was made, if the price level has risen by the time the benefit is actually received, the purpose and meaning of joining the insurance will be lost. Especially when the decline in the value of money is large, the policyholder or recipient will have to cover most of the required funds with their own funds. In this case, there is no meaning in using the insurance system over the years or for most of one's life. 3 Conventionally, there was no product like lifetime medical insurance. Medical insurance was an endorsement added to life insurance. The mainstream products had a coverage period from 60 to 65 years old when the premium payment ended, and paid a lump sum and could be optionally continued until 80 years old. As the average life expectancy increased, overseas insurance companies sold single medical insurance in the Japanese market, and eventually lifetime medical insurance emerged and became the mainstream of medical insurance. Since lifetime medical insurance became popular and established in the first quarter of the 21st century, only about 25 years have passed. There is not a single policyholder who has filed a benefit claim after 50 or 60 years since the contract was signed. Therefore, the lessons based on the actual experience of inflation risk have not been shared and inherited. Especially in Japan, a major insurance country, the policyholder period overlapped with the long-term deflation period after the collapse of the bubble economy, and prices rose at a slower pace than the world, so the problem has not surfaced. 4 Life insurance policyholders, unless they are experts in macroeconomics, contract while mistakenly feeling that the current monetary value will last forever without considering the future monetary value of the benefits. 5 Life insurance company sales staff (recruiters) design and propose insurance casually without considering the future monetary value of the benefits (without malice and without the policyholder noticing either) because there is no product with a price slide function in the product lineup offered to customers. 5 The lifetime insurance that is most strongly affected by inflation has an interval of about four and a half decades from the end of premium payment at 60 to 65 years old until death at 85 to 90 years old for most contracts. During this period, the death benefit will not increase by a single yen no matter how much prices rise. On the other hand, since the insurance company invests the surrender value, it has increased its revenue and profit. This is not a win-win contract. The present invention has been made to eliminate the above-mentioned drawbacks.

Means for Solving the Problems

[0006] There are two types of lessons: "knowledge lessons" and "experience lessons". Knowledge lessons are a category that do not require one's own experience and inherit the experiences of predecessors as knowledge. For example, "When adrift at sea, even if thirsty, do not drink seawater", "When tired in the snow-capped mountains, do not sleep on the snow" and so on. Experience lessons are a category that does not accept what predecessors say and can only be achieved through direct personal experience. For example, "Even if in love, do not marry a clumsy person", "Do not become a guarantor for a friend's debt" and so on. The lesson that "war must not be repeated" is an experience lesson, so it is not passed down between generations, and humanity repeats wars. The sense of crisis regarding the phenomenon of prices rising over time is also an experience lesson and is not passed down between generations. It must be learned through actual experience rather than theoretical understanding. However, by the time learning is completed through actual experience, it is exactly when one has aged, so even if one tries to make use of the lessons learned, it is already too late. Life insurance policyholders cannot permanently escape from such dilemmas. Therefore, in order to fulfill the social mission of "providing people with future peace of mind", life insurance companies that exist to fulfill their raison d'être develop insurance products that hedge against the decline in the value of money due to rising prices, just like public pensions, and provide a service that enables customers to receive benefits substantially equivalent to the necessary protection amount set at the time of contract, regardless of how future price levels change. Insurance companies define four items as risks that occur beyond normal expectations: (1) insurance risk, (2) economic risk, (3) investment risk, and (4) business risk. (1) refers to sudden changes in mortality rates such as major disasters and pandemics. (2) refers to economic downturns, deteriorations in the economic situation, etc. (3) refers to sharp drops in stock prices, drastic fluctuations in exchange rates, bad debts, investment failures, etc. (4) refers to non-operating losses, business crises, etc. Here, as a new risk, inflation risk is added to (2). This is the relative decline risk of the insurance money value accompanying good economic conditions and economic growth, which is the exact opposite of the conventional (2). The present invention is a life insurance with a price slide function having the above configuration.

Effects of the Invention

[0007] 1. The structural defects of conventional insurance products, which were designed and developed on the premise of future predictions that a country will never achieve permanent economic growth and prices will never rise, can be corrected. 2. Policyholders of life insurance can live with a sense of security, knowing that the necessary and sufficient insurance benefits set as the purpose of the contract can be received at the price level of that era in the future, regardless of how inflation progresses, so that the real value of the insurance benefits does not decline. 3. It is possible to resolve the irrationality that both public pensions and private pensions are for life security in the future when one becomes elderly, but a price slide is indispensable for public pensions while a price slide is considered completely unnecessary for private pensions. 4. Insurance products that can respond to price increases are far more attractive than insurance products that cannot respond to price increases. Therefore, insurance companies selling such insurance products can enhance CS (customer satisfaction), develop customer acquisition and sales advantageously, strengthen competitiveness, and improve corporate value. 5. Life insurance policyholders bear two risks: the "risk of insolvency" and the "inflation risk". The former is, to some extent, avoided by the Policyholder Protection Institution, although it is not perfect. Furthermore, insurance companies can be selected based on criteria such as the solvency margin ratio. For the latter, there is variable insurance with an asset management function as an inflation hedge, but this is a fund and is subject to uncertainties depending on each company's trading ability. In contrast, the inflation hedge through price slide is direct and certain. 6. Inflation due to long-term economic growth is a normal and healthy phenomenon. However, in the case of inflation clearly caused by a failure in economic operation (policy) such as hyperinflation, it is possible to resolve the unreasonableness that insurance policyholders who have not participated in economic operation at all are made to bear sole responsibility for the results. 7. The most fundamental social mission of a life insurance company, which is to provide "protection against contingencies" and "peace of mind for the future" to policyholders, is fulfilled.

Brief Description of the Drawings

[0008]

Figure 1

Embodiments for Carrying Out the Invention

[0009] Hereinafter, embodiments for carrying out the present invention will be described. In life insurance, the insurance premium (P) and the insurance benefit (S) are calculated based on three items: "expected mortality rate", "expected operating expense rate", and "expected interest rate". All insurance products are designed to generate profits from the beginning based on the "expected mortality rate". Unless the life expectancy table changes drastically, the insurance business is, in principle, structured to be profitable. Also, the "expected operating expense rate", which is the personnel cost of employees and the maintenance and management cost of bases, is incorporated into the insurance premium. And the "expected interest rate" is the expected investment income. The investment income is distributed between the operator and the policyholder, but the policyholder's share is offset from the beginning by a discount on the insurance premium, and a dividend is generated only when the actual income exceeds the expectation. The "expected interest rate" is linked to the "rate of return on capital", and the "rate of price increase" is linked to the "economic growth rate". And it is the fundamental principle of a capitalist economy that "rate of return on capital > economic growth rate" always holds. If this principle did not exist, the wealth of workers would exceed the wealth of capitalists, and thus the capitalist economy would not be established. Therefore, inflation never exceeds the range of the expected interest rate. That is, even if the insurance company adds a price slide function to the insurance benefit (S) while keeping the current insurance premium (P), it will never result in a loss. However, as a trade-off for CS (customer satisfaction), the profit margin of the operating profit in the sale (sales) of insurance products will surely shrink. The important thing is that what is needed is not a "discount on the insurance premium" but an "increase in the insurance benefit". Inflation hedging cannot be achieved without preparing on an S basis instead of a P basis. Therefore, set the expected interest rate, that is, the discount rate of the insurance premium, to zero, and use the investment income itself as the dividend instead of the surplus of the investment income. And limit the method of receiving the dividend to only the automatic increase in the insurance benefit, and link the insurance benefit to a price slide function, that is, the rate of increase in the consumer price index (CPI) and other macroeconomic indicators. In fact, even if the planned interest rate is not completely zero, inflation hedging is possible as long as the numerical value obtained by subtracting the economic growth rate from the capital gain rate is decreased by an amount less than the planned interest rate based on the standard interest rate. Alternatively, the same effect can be achieved by increasing the insurance premium by the same amount as the decrease in the planned interest rate without decreasing the planned interest rate. This additional amount can be set as the insurance premium for the "price slide rider" or included in the main contract from the beginning. When the economy grows, the stock price, land price, precious metals, lending interest rates, etc. increase in proportion to the growth rate, and thus the income of insurance companies operating these also increases. As a natural result, the dividends of policyholders also generally increase in proportion to inflation. At this time, for example, a 30-year-old policyholder has a greater future inflation risk than a 60-year-old policyholder, but can purchase a greater amount of protection for the same amount of money. For a 60-year-old, the amount of protection that can be purchased is smaller, but the future inflation risk is also smaller, so it is consistent for all age groups. In an individual contract, instead of adding insurance money by using the dividend as the insurance premium, if it can be pooled by the insurance company as a whole, a new accounting item called "price fluctuation reserve" can be created and incorporated. That is, by simply selling non-dividend insurance at the dividend rate of dividend-paying insurance, a product that can overcome inflation can be realized.

Industrial Applicability

[0010] Probably in the 22nd century, an insurance mathematical model called Virtual Contractor (VC) will be developed. VC does not actually exist and only exists for convenience in the financial statements of insurance companies. The virtual contractor accumulates insurance money infinitely by using the dividend generated for real policyholders as its own insurance premium every time a dividend occurs. Naturally, it is subject to the liability reserve. Then, when paying insurance money to real policyholders, it becomes possible to pay insurance money corresponding to the increased price since the time of contract conclusion, that is, insurance money upwardly revised by the consumer price index. The source of this additional amount is to liquidate and contribute the price fluctuation reserve (VC's insurance money). Since VC originally does not exist, it will not complain no matter what is done.

Claims

**Claim 1** A life insurance with a lifelong contract period such as whole life insurance, lifelong medical insurance, and lifelong annuity, and an ultra-long-term or long-term term insurance equivalent to lifelong, or a long-term endowment insurance or education fund insurance. When the reason for payment occurs for the insurance money, benefit payment, or annuity of the main contract and rider, and the insurance company pays the insurance money to the recipient based on the insurance contract, the price changes during the period from the time of contract to the time of payment are linked to macroeconomic indicators such as the consumer price index (CPI), so that the policyholder can receive an insurance payment (required protection amount) substantially of the same value as the insurance money expected and set at the time of contract at the time when the reason for payment occurs. A life insurance with a price slide function, characterized by providing a price slide function.

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