Insurance Subsidy Calculation Module for Immediate Expense Payout
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Solution Overview
Problem
Conventional life insurance schemes often take several months or years to process and finalize payments, leaving insured individuals with short-term financial difficulties during life-changing events like disability or dread diseases.
Innovation Solution
A system and method that calculates and provides a subsidy to insured individuals or beneficiaries by accessing historical or actual expense data, incorporating wellness program participation, to facilitate immediate financial assistance through defined categories of expenses, with payment modules capable of crediting credit or debit cards.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Loss of time
If conventional life insurance payment processing is used, then the sum assured is paid to the insured life or beneficiary, but the payment processing and finalisation takes several months or even years, causing short term financial difficulties for the insured person
Solution Approach 1:
The system pre-calculates and stores the sum assured amount and expense category allocations before the insured event occurs. When an insured event happens, the pre-calculated amounts are immediately disbursed without requiring lengthy processing or verification, thus resolving the contradiction between fast payment and reliable payment by having all calculations done in advance
Solution Approach 2:
The sum assured is divided into multiple expense categories (medical, funeral, living expenses, etc.) with predetermined amounts for each category. This segmentation allows different portions of the payment to be processed and disbursed independently and simultaneously, reducing overall processing time while maintaining accountability for each expense type
2Ease of operation
If the sum assured is paid only after insured event occurrence, then the insurance company maintains financial control, but the insured person experiences financial difficulties during the waiting period
Solution Approach 1:
The system performs preliminary calculations of the sum assured allocation across different expense categories before the insured event occurs. This pre-computation ensures that when the event happens, funds can be immediately released without delay, making financial support easily accessible while eliminating the energy-consuming wait period and associated financial stress
Data Source
AI summary
A system for managing an insurance scheme includes a calculation module to, on the occurrence of an insured event for an insured person, calculate a subsidy for expenses for the insured person or a nominated beneficiary. The subsidy is calculated by accessing data defining a plurality of categories of expenses and determining for each category a spend amount. The spend amount is either an average historical spend amount over a period of time prior to the insured event or an actual spend amount for a period of time after the insured event. A percentage is then calculated using the insured person's participation with a wellness program. Finally, the amount of the subsidy is calculated by multiplying the percentage by the spend amount. A payment module effects payment of the subsidy to the insured person, the nominated beneficiary or a third party goods or services provider.