Dynamic Insurance Benefit Calculation System
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Solution Overview
Problem
Conventional insurance payout methods for life insurance policies are often arbitrary and do not adequately consider the time factor and life impact of insured events, such as disability or dread diseases, when determining benefit amounts.
Innovation Solution
A system and method that includes a calculation module to assess the life impact of insured events by assigning point values to criteria like duration of impact, invasiveness of treatment, and required care, and a time factor based on duration and age, with an earnings factor considering the insured's occupation and salary growth expectations, to adjust benefit payouts accordingly.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Measurement precision
If conventional arbitrary methods are used to calculate insurance payouts, then the calculation process is simple, but the fairness and accuracy of benefit amounts are poor
Solution Approach 1:
The benefit calculation is segmented into multiple independent modules: a benefit definition module that defines insured events and base benefits, and a calculation module that applies adjustment factors. This segmentation allows the system to maintain simplicity while improving accuracy by separating the basic structure from the complex calculation logic.
Solution Approach 2:
The calculation module adjusts benefit amounts by changing parameters such as time factors (duration since insured event) and life impact scores (based on criteria like duration of impact, invasiveness of surgery, therapy required). These parameter changes enable dynamic, accurate benefit calculations without requiring a completely complex system architecture.
2Adaptability or versatility
If traditional fixed benefit amounts are used, then the insurance scheme is easy to manage, but the benefits do not reflect the actual life impact and time factor of insured events
Solution Approach 1:
The benefit amount transitions from a fixed value to a dynamic value that automatically adjusts based on time factors and life impact criteria. The calculation module continuously evaluates these factors and modifies the benefit amount accordingly, making the system adaptable without requiring complex manual intervention.
Solution Approach 2:
The calculation module performs self-service by automatically evaluating life impact criteria (duration of impact, invasiveness of surgery, pharmacological treatment, therapy required, chemotherapy or radiotherapy, assisted devices required) and adjusting benefits without external intervention. This maintains ease of management while achieving adaptability.
3Reliability
If arbitrary payout methods are used, then the administrative process is simple, but the benefits do not align with long-term financial implications of insured events
Solution Approach 1:
The calculation module incorporates feedback mechanisms by evaluating life impact criteria and time factors, then using this feedback to adjust benefit amounts. This ensures that benefits align with the actual financial implications of insured events, improving reliability while maintaining manageable complexity through automated feedback loops.
Data Source
AI summary
A system for managing an insurance scheme includes a benefit module to define at least one insured event for an insured person and to define at least one benefit to be paid out on the occurrence of one of the insured events. A calculation module alters the at least one benefit based on a) a time factor; and b) the life impact of the insured event on the insured person. An awards module, on the occurrence of the at least one insured event, provides the at least one altered benefit to the insured person.