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Insurance Abstract
A method of providing insurance coverage to a customer comprising
the steps of: (1) selling a debt protection contract to a customer;
and (2) in response to the customer purchasing the debt protection
contract, providing third-party-paid insurance coverage to the customer
at no substantial cost to the customer. This may be done, for example,
to avoid the need to have a licensed insurance agent available when
the customer acquires the insurance product. In various embodiments
of the invention, the debt protection contract may be, for example,
a debt deferment contract or a debt cancellation contract.
Insurance Claims
1. A method of providing insurance coverage to a customer, said
method comprising the steps of: selling a debt protection contract
to a customer; purchasing insurance coverage that provides benefits
to said customer, said insurance coverage being selected from a
group consisting of: property insurance coverage, casualty insurance
coverage, and health insurance coverage; and in response to said
customer purchasing said debt protection contract, providing said
insurance coverage to said customer at no cost to said customer.
2. The method of claim 1, wherein said insurance coverage comprises
property insurance coverage.
3. The method of claim 1, wherein said insurance coverage comprises
casualty insurance coverage.
4. The method of claim 1, wherein said insurance coverage comprises
health insurance coverage.
5. The method of claim 1, wherein said step of providing said insurance
coverage to said customer is done by a party that has an insurable
interest in property that is covered by said insurance coverage.
6. The method of claim 5, wherein said party has obtained said
insurable interest in said property by virtue of a relationship
between said party and said customer.
7. The method of claim 1, wherein said step of providing said insurance
coverage to said customer is done by a party that has an insurable
interest in a person that is covered by said insurance coverage.
8. The method of claim 7, wherein said party has obtained said
insurable interest in said person by virtue of a relationship between
said party and said customer.
9. The method of claim 1, wherein said step of providing said insurance
coverage is done in order to permit the provision of said insurance
coverage to said customer without a sale of said insurance coverage
by an insurance agent.
10. The method of claim 1, wherein said debt protection contract
is a debt deferment contract.
11. The method of claim 1, wherein said debt protection contract
is a debt cancellation contract.
12. The method of claim 1, wherein said debt protection contract
is a debt holiday contract.
13. The method of claim 1, wherein: said debt protection contract
is associated with a credit card issued to said customer by a creditor;
and said insurance coverage is paid for by said creditor.
14. The method of claim 1, wherein: said debt protection contract
is associated with a private label credit card issued to said customer;
and said insurance coverage is paid for by a retailer associated
with said private label credit card.
15. The method of claim 1, wherein: said debt protection contract
is associated with a revolving line of credit issued to said customer
by a creditor.
16. The method of claim 1, wherein: said debt protection contract
is associated with an installment loan issued to said customer by
a creditor.
17. The method of claim 1, wherein: said debt protection contract
is associated with a mortgage loan to said customer by a creditor.
18. The method of claim 1, wherein said insurance coverage provides
for one or more payments to be made in response to said customer
becoming disabled.
19. The method of claim 18, wherein: said debt protection contract
is associated with a credit account issued to said customer; and
said one or more payments comprises a credit to said credit account.
20. The method of claim 1, wherein said insurance coverage provides
for one or more payments to be made in response to said customer
becoming disabled.
21. The method of claim 1, wherein said insurance coverage provides
for one or more payments to be made in response to said customer
becoming involuntarily unemployed.
22. The method of claim 21, wherein said one or more payments are
made to purchase health insurance for said customer.
23. The method of claim 1, wherein said insurance coverage provides
for one or more payments to be made in response to said customer
becoming divorced.
24. The method of claim 1, wherein said insurance coverage provides
for one or more payments to be made in response to said customer
taking a leave of absence from work.
25. A debt protection plan comprising: debt protection coverage
that is paid for by a first entity; and insurance coverage that
is paid for by a second entity.
26. The debt protection plan of claim 25, wherein said debt protection
plan is referenced by a single identification indicia.
27. The debt protection plan of claim 25, wherein said debt protection
coverage comprises a debt cancellation contract.
28. The debt protection plan of claim 25, wherein said debt protection
coverage comprises a debt deferment contract.
29. The debt protection plan of claim 25, wherein said debt protection
coverage is associated with a credit card issued to said first entity
by said second entity.
30. The debt protection plan of claim 25, wherein: said debt protection
coverage is associated with a private label credit card issued to
said first entity; and said second entity is a retailer associated
with said private label credit card.
31. The debt protection plan of claim 25, wherein said insurance
coverage comprises property insurance.
32. The debt protection plan of claim 25, wherein said insurance
coverage comprises casualty insurance.
33. The debt protection plan of claim 25, wherein said insurance
coverage provides for one or more payments to be made in response
to said first entity becoming disabled.
34. The debt protection plan of claim 25, wherein said insurance
coverage provides for one or more payments to be made in response
to said first entity becoming involuntarily unemployed.
35. The debt protection plan of claim 25, wherein said insurance
coverage provides for one or more payments to be made in response
to said first entity taking a specified leave of absence.
36. The debt protection plan of claim 25, wherein said insurance
coverage provides for one or more payments to be made in response
to said first entity obtaining a divorce.
37. The debt protection plan of claim 25, wherein: said debt protection
coverage is associated with a credit account issued to said first
party; and said insurance coverage provides for one or more payments
to be made in response to particular property being damaged, said
particular property having been purchased by said first party and
charged to said credit account.
38. The debt protection plan of claim 25, wherein: said debt protection
coverage is associated with a credit account issued to said first
party; and said insurance coverage provides for one or more payments
to be made in response to particular property mysteriously disappearing,
said particular property having been purchased by said first party
and charged to said credit account.
39. The debt protection plan of claim 25, wherein: said debt protection
coverage is associated with a credit account issued to said first
party; and said insurance coverage provides for one or more payments
to be made in response to particular property being lost, said particular
property having been purchased by said first party and charged to
said credit account.
40. The debt protection plan of claim 25, wherein said debt protection
plan provides that said insurance coverage will be canceled in response
to said first party canceling said debt protection coverage.
41. A method of providing insurance coverage to a customer, said
method comprising the steps of: selling a debt protection contract
to a customer; purchasing insurance coverage that provides benefits
to said customer, said insurance coverage being selected from a
group consisting of: property insurance coverage, casualty insurance
coverage, and health insurance coverage; and in response to said
customer purchasing said debt protection contract, providing said
insurance coverage to said customer.
42. The method of claim 41, wherein said step of providing said
insurance coverage to said customer comprises providing said insurance
coverage to said customer at substantially no cost to said customer.
Insurance Description
BACKGROUND OF THE INVENTION
[0001] 1. Background Regarding Debt Cancellation and Debt Deferment
Policies
[0002] A typical debt protection contract is associated with a
credit account (such as a credit card account) issued by a creditor
to a borrower (i.e., a customer). Debt protection contracts include,
for example, debt cancellation contracts, debt deferment contracts,
and debt holiday contracts.
[0003] Typical debt cancellation contracts serve to cancel all
or part of the debt or interest owed by the borrower to the creditor
if the borrower dies, becomes disabled, becomes involuntarily unemployed,
or takes a specified leave of absence (or if some other specified
event occurs). A typical debt deferment contract serves to defer
all or a part of the debt or interest owed by the borrower to the
creditor in the event that the creditor becomes disabled, becomes
involuntarily unemployed, takes a specified leave of absence, or
obtains a divorce (or if some other specified event occurs). Similarly,
a typical debt holiday contract serves to defer interest and/or
principal payments associated the credit account (or part of these
payments) for a certain period of time if a certain event occurs
(e.g., the cardholder becomes disabled, becomes involuntarily unemployed,
takes a specified leave of absence, obtains a divorce, or if some
other specified event occurs.)
[0004] 2. Background Regarding the Sale of Insurance Products
[0005] Most states have laws in place specifying that only a licensed
insurance agent may sell insurance products. As a result, retailers
and/or creditors who wish to provide insurance type benefits to
a customer at a point of sale must arrange for an insurance agent
to be present at the point of sale when the customer purchases the
insurance. This can be expensive and inconvenient for the retailer.
[0006] There is currently a need for improved types of insurance
and non-insurance products, and for improved methods for conveniently
and inexpensively providing insurance and non-insurance products
to customers.
SUMMARY OF THE INVENTION
[0007] One embodiment of the invention comprises a method for providing
a third-party paid insurance product to a customer. This may be
done, for example, to avoid the need to have a licensed insurance
agent available when the customer is provided the benefits of the
insurance product.
[0008] More particularly, a method of providing insurance coverage
to a customer according to one embodiment of the invention comprises
the steps of: (1) selling a debt protection contract to a customer;
(2) purchasing insurance coverage that provides benefits to the
customer, and (3) in response to the customer purchasing the debt
protection contract, providing the insurance coverage to the customer.
In certain embodiments of the invention, the step of providing the
insurance coverage to the customer is done at no cost, or substantially
no cost, to the customer. In various of the invention, the step
of providing the insurance coverage to the customer may done at
a cost to the customer. For example, in certain embodiments of the
invention, the insurance coverage may be provided to the customer
at the current market value for the insurance coverage, or at a
discounted cost (e.g., a discounted cost that is substantially below
market value for the insurance coverage).
[0009] In various embodiments of the invention, the insurance coverage
may be, for example, property insurance coverage, casualty insurance
coverage, or health insurance coverage. Similarly, in various embodiments
of the invention, the debt protection contract may be, for example,
a debt deferment contract, a debt cancellation contract, a debt
protection contract, or a hybrid of any these types of contracts.
[0010] In a particular embodiment of the invention, the step of
providing the insurance coverage to the customer is done by a party
that has an insurable interest in property that is covered by the
insurance coverage. In one embodiment, this party has obtained an
insurable interest in the property by virtue of a relationship between
the party and the customer.
[0011] Also, in a particular embodiment of the invention, the step
of providing the insurance coverage to the customer is done by a
party that has an insurable interest in a person that is covered
by the insurance coverage. In one embodiment, this party has obtained
an insurable interest in the person by virtue of a relationship
between the party and the customer.
[0012] A debt protection plan according to a particular embodiment
of the invention comprises: (1) debt protection coverage that is
paid for by a first entity; and (2) insurance coverage that is paid
for by a second entity. In one embodiment of the invention, the
debt protection plan is referenced by a single identification indicia.
In a particular embodiment of the invention, the debt protection
coverage comprises a debt cancellation contract. In another embodiment,
the debt protection coverage comprises a debt deferment contract.
In a further embodiment of the invention, the debt protection contract
is a debt holiday contract.
BRIEF DESCRIPTION OF THE DRAWINGS
[0013] Having thus described the invention in general terms, reference
will now be made to the accompanying drawings, wherein:
[0014] FIG. 1 is a flow chart depicting a method, according to
a particular embodiment of the invention, of providing insurance
to a customer.
DETAILED DESCRIPTION OF VARIOUS EMBODIMENTS OF THE INVENTION
[0015] The present invention will now be described more fully hereinafter
with reference to the accompanying drawings, in which various embodiments
of the invention are shown. This invention may, however, be embodied
in many different forms and should not be construed as limited to
the embodiments set forth herein. Rather, these embodiments are
provided so that this disclosure will be thorough and complete,
and will fully convey the scope of the invention to those skilled
in the art. Like numbers refer to like elements throughout.
Overview of Various Aspects of the Invention
[0016] One embodiment of the invention comprises a method for providing
a third-party paid insurance product to a customer. As noted above,
this may be done, for example, to avoid the need to have a licensed
insurance agent available when a retailer or creditor wishes to
provide the customer with the benefits of an insurance product.
[0017] More particularly, as may be understood from FIG. 1, a method
of providing insurance coverage to a customer according to a particular
embodiment of the invention comprises a first step 100 of purchasing
an insurance policy from an insurance company to provide benefits
to a customer purchasing a debt protection contract. This method
further comprises a second step 200 of selling a debt protection
contract to the customer. In addition, the method further comprises
a third step 300 of, in response to the customer purchasing the
debt protection contract, providing third-party-paid insurance coverage
to the customer at no cost to the customer. In one embodiment of
the invention, the debt protection contract is a debt deferment
contract. In another embodiment of the invention, the debt protection
contract is a debt cancellation contract. In a further embodiment
of the invention, the debt protection contract is a debt holiday
contract. Steps 100 and 200 above may be performed in any convenient
order.
[0018] In a particular embodiment of the invention, the debt protection
contract is associated with a credit card account (or other credit
account) issued to the customer by a creditor, and the third-party-paid
insurance coverage is paid for by the creditor. The third-party-paid
insurance coverage may be, for example, property insurance or casualty
insurance.
[0019] In another embodiment of the invention, the debt protection
contract is associated with a credit card account (or other credit
account) issued to the customer by a creditor, and the third party
paid insurance coverage is paid for by a retailer selling the merchandise
that will be financed by the creditor.
[0020] In one embodiment of the invention, the third-party-paid
insurance coverage provides for one or more payments to be made
(e.g., to the customer or other designated party) in response to
the occurrence of one or more of the events that trigger the customer's
debt protection contract. For example, the third-party-paid insurance
coverage may provide for a lump sum payment to be made to the customer
in response to the customer: (1) becoming disabled; (2) becoming
involuntarily unemployed; (3) taking a specified leave of absence
from their job; or (4) obtaining a divorce.
[0021] In another embodiment of the invention, the debt protection
contract is associated with a credit account (such as a credit card
account) and provides for one or more payments to be made in response
to property that was purchased by the customer and charged to the
credit account: (1) being damaged; (2) mysteriously disappearing;
or (3) being lost. In various embodiments of the invention, such
payments may be made to provide for repair or replacement of the
property at issue. The payments may be made, for example, to the
customer or another designated party.
Provision of the Insurance Coverage
[0022] The third-party-paid insurance coverage described above
may be provided to the customer in any suitable manner. For example,
the third-party-paid insurance coverage may be provided automatically
to the customer in response to the customer purchasing a debt protection
contract. Alternatively, the insurance may be provided after for
the customer purchases the debt protection contract. For example,
in one embodiment of the invention, the customer is automatically
sent enrollment forms after purchasing the debt protection contract.
The insurance coverage is then activated in response to the receipt
of the completed enrollment forms from the customer. Where permitted,
the third-party-paid insurance coverage may be provided (e.g., at
the request of a retailer or creditor) to customers who call to
cancel an existing debt protection contract and who, in exchange
for the third-party-paid insurance coverage, agree not to cancel
the existing debt protection contract.
[0023] In various embodiments of the invention, the third-party-paid
insurance coverage is provided in connection with one or more debt
protection policies that are sold: (1) at a point of sale; (2) by
inbound telemarketing; (3) via the Internet; (4) via a paper mail-in
or store-deposited application; (5) by statement insert marketing;
(6) by outbound telemarketing; and/or (7) at the time that a credit
card covered by the debt protection contract is activated.
[0024] In certain embodiments of the invention, the debt protection
contract may either be a provision in a credit agreement between
a borrower and a creditor or an amendment to a credit agreement
between the borrower and the creditor.
[0025] In one embodiment of the invention, the third-party-paid
insurance coverage is provided on a group basis, in which case the
borrower receives a certificate of insurance. In another embodiment
of the invention, this insurance coverage is provided on an individual
basis, in which case the borrower receives an insurance policy.
In another embodiment of the invention, the third party paid insurance
coverage is provided on a blanket basis, in which case the borrower
receives a summary of benefits.
[0026] In a particular embodiment of the invention, the debt protection
contract and the third-party-paid insurance coverage are provided
by different providers. For example, in one embodiment, the debt
protection contract is provided by a first entity and the third-party-paid
insurance coverage is provided by a second entity. In another embodiment
of the invention, a single provider provides both the debt protection
contract and the third-party-paid insurance coverage.
Payment of Premiums
[0027] In a particular embodiment of the invention, the premium
for the third-party-paid insurance coverage is not paid by the customer
or by the insurer providing the third-party-paid insurance coverage.
Rather, in one embodiment of the invention, the debt protection
contract is associated with a credit account (e.g., a credit card
account) issued by a creditor to a borrower (i.e., a customer),
and the premiums for the third-party-paid insurance coverage are
paid by the creditor. Alternatively, the premiums for the third-party-paid
insurance coverage are paid by a retailer associated with a private
label line of credit (e.g., a private label credit card) issued
to the borrower. For example, Home Depot may offer to pay the premiums
for a certain insurance coverage when a customer signs up for a
Home Depot branded credit card account and purchases a debt protection
contract associated with that credit card account.
[0028] As will be understood by one skilled in the relevant field
in light of this disclosure, the premium for the third-party-paid
insurance coverage may be payable monthly, in a single or annual
payment, or according to any other appropriate schedule.
Payment of Benefits
[0029] The benefits payable under the terms of the third-party
paid insurance coverage may vary according to the terms of the particular
policy. However, in various embodiments of the invention, the benefit
may be payable in the form of: (1) a cash payment; (2) a credit
to the customer's credit card or other credit account; (3) a gift
card; (4) credit card "points", such as frequent flyer
miles; (5) item replacement; (6) repair of the item, or (7) any
other appropriate currency. The amount of the benefit paid will
depend upon the terms of the third-party paid insurance coverage.
Relationship Between the Debt Protection Contract and the Third-Party-Paid-Insurance
Coverage
[0030] In any of the embodiments of the invention described in
this disclosure, the debt protection contract and the third-party-paid-insurance
coverage may be provided within a single debt protection plan, which
may, for example, be memorialized in a single agreement. For example,
the debt protection contract may be embodied within a first provision
of a single debt protection plan, and the third-party-paid insurance
coverage may be memorialized within a second provision within that
same debt protection plan. This single debt protection plan is preferably
referenced by a single identification indicia (e.g., a single policy
number), but may alternatively be referenced by more than one identification
indicia (e.g., two different policy numbers). Alternatively, in
any of the embodiments of the invention described in this disclosure,
the debt protection contract and the third-party-paid insurance
coverage may be provided within two or more separate policies, each
of which may be memorialized in a separate insurance agreement
Effect of the Cancellation of the Debt Protection Contract
[0031] In one embodiment of the invention, if the debt protection
contract is cancelled in its entirety, (e.g., by the customer or
the creditor) the related third-party-paid insurance coverage will
automatically terminate. However, in a particular embodiment of
the invention, if the customer reduces the scope of their debt protection
contract by canceling one or more, but not all, of the benefits
under the debt protection contract, the third-party-paid insurance
coverage will remain in effect as long as the creditor or other
third party continues to pay the premiums associated with the debt
protection contract. For example, in this embodiment, the insurance
coverage will remain in effect if the customer cancels a disability
benefit associated with the debt protection contract, but retains
other benefits (such as an unemployment benefit) associated with
the debt protection contract. In an alternative embodiment of the
invention, the third-party-paid insurance coverage will automatically
terminate in response to the customer reducing the scope of their
debt protection contract.
Effect of the Termination of the Third Party Paid Insurance Coverage
[0032] In a particular embodiment of the invention, if the third
party who is providing the third-party-paid insurance coverage terminates
the insurance coverage or causes this insurance coverage to lapse
for non-payment of premium, the debt protection contract will remain
in effect as long as the borrower continues to pay the applicable
fees.
CONCLUSION
[0033] Many modifications and other embodiments of the invention
will come to mind to one skilled in the art to which this invention
pertains having the benefit of the teachings presented in the foregoing
descriptions and the associated drawings. For example, as described
above, in various embodiments, insurance coverage is provided to
the customer at no cost, or at substantially no cost, to the customer.
However, in various embodiments of the invention, the step of providing
insurance coverage to the customer may done at a cost to the customer.
For example, in various embodiments of the invention, the insurance
coverage may be provided to the customer at the current market value
for the insurance coverage, or at a discounted cost (e.g., a discounted
cost that is substantially below market value for the insurance
coverage).
[0034] Accordingly, it should be understood that the invention
is not to be limited to the specific embodiments disclosed and that
modifications and other embodiments are intended to be included
within the scope of the appended claims. Although specific terms
are employed herein, they are used in a generic and descriptive
sense only and not for purposes of limitation.
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