You can access your ANNUITYLife cash value by borrowing, or cash surrender, just like Value-Added Whole Life , or you can elect a lifetime annuity payment to age 100. If you don’t live to age 100, the present value of future payments is paid to your beneficiary. If you live past age 100, annuity payments will still be paid.

Your ANNUITYLife policy is guaranteed to earn a minimum interest rate of 4.5% and has a graded death benefit. It will pay a minimum of 90% of the initial death benefit in year one, 95% in year two, and 100% in year three, and thereafter. Premiums for both policies are fixed and will never increase. If you ever choose to surrender either policy, you will receive the greater of: 1.) Your total premiums paid less any outstanding indebtedness, or 2.) Your current cash surrender value less any outstanding indebtedness

Your Value-Added Whole Life policy is guaranteed over the life of the policy to earn a minimum interest rate of 4.5% and the initial death benefit is guaranteed for your life. The premium is fixed and will never increase.

If you ever choose to surrender your policy, you will receive the greater of:

1. Your total premiums paid less any outstanding indebtedness, or
2. Your current cash surrender value less any outstanding indebtedness

    

The guarantee of the return of total premiums paid is forfeited if the policy is converted to Reduced Paid Up or if a partial cash surrender has been made. In either case, the policy owner will receive the current cash surrender value less any outstanding indebtedness.

You can access your cash value in two ways:

1. You can borrow up to 75% of your cash value less any current indebtedness: The variable loan interest rate is currently 1% above AAFMAA’s current crediting rate. For example, if the crediting rate is 7%, the variable loan interest rate is 8%. The crediting rate is set each year. The money you receive in loan amount is still credited with AAFMAA’s current crediting rate, just as if it had never been borrowed. Although there are no income tax consequences at the time the loan is taken (except for Modified Endowment Contracts (MEC)) any interest due that is not paid will be added to the loan principal. If the combined loan principal and accrued interest exceed the current cash value of the policy, the policy will lapse. There may be income tax consequences and/or changes to membership status and benefits at the time of policy lapse.

    

2. You can surrender your policy: If the amount of cash value surrendered exceeds the premiums paid, the gain will be reportable to the IRS as taxable ordinary income and you will receive an IRS form 1099.

    

To get a policy loan, give us a call at 1-800-336-4538. You can also find the form here. Completed forms can be emailed to policyservices@aafmaa.com or sent to 1856 Old Reston Avenue, Suite 200, Reston, VA 20190.

Yes, you can pay a one-time, lump sum upon approval and that lump sum becomes the base of your cash value. Your death benefit and cash value will keep growing over the years. We don’t recommended this option if you intend to borrow money from the cash value in the future because you will have to pay taxes and, if you are under the age of 59 ½ when you borrow, you will also have to pay a 10% penalty to the IRS.

AAFMAA can create a growth projection when you request an application and another one when your policy is issued. You will see the growth based on a minimum guaranteed crediting rate of 4.5% and growth based on our current crediting rate of 6.8% for 2013 (established annually and not guaranteed). You must apply for an additional policy to increase the Death Benefit on the policy.

The beneficiary will only receive the death benefit. The cash value is money that is available to the insured while the insured is still living. The insured can borrow up to 75% of the cash value or can cancel the policy (as described above) and get 100% of the cash value or premiums paid, whichever is greater.

Three factors affect cash value increases:

1. Premium: All premium payments are added to the cash value
2. Expenses: Any insurance and expense charges are deducted
3. Cash Value: The cash value is then credited with monthly interest

    

It’s important to note that as long as you keep your policy in force, the growth in your cash value is not taxable. However, if the policy is surrendered, or cancelled (as described above), any cash value in excess of the premiums paid is taxable income and reported to the IRS on a form 1099R. Also, the death benefit goes to the beneficiary(s) tax free.