Patent ID: 7376609

Claim:
A method for implementing an index-linked life insurance product having a term and an annual guarantee, comprising: allocating at least a portion of a premium payment associated with the index-linked life insurance product to a fixed income investment and projecting an annual fixed income yield for the fixed income investment; determining a hedged investment budget based at least in part on the projected annual fixed income yield and an estimated cost of the annual guarantee over the term, wherein at least a portion of the estimated cost of the annual guarantee is allocated to a risk fund and wherein the term has a term length greater than one year; allocating the hedged investment budget to a hedged investment linked to an index in order to generate proceeds for supporting an amount credited to the index-linked insurance product based on index-linked earnings; determining the occurrence of a predetermined event where the amount credited based on the index-linked earnings is not equal to at least the annual guarantee compounded over the term; and upon the occurrence of a predetermined event where the amount credited based on the index-linked earnings is not equal to at least the annual guarantee compounded over the term, using funds from the risk fund to increase the amount credited to be substantially equal to the annual guarantee compounded over the term.