AAFMAA Settlement Options
AAFMAA offers six Settlement Options for beneficiaries of AAFMAA Life Insurance policies. For all options (except Lump Sum) AAFMAA guarantees a 4% interest rate. If AAFMAA’s Net Yield on Assets (NYA) exceeds the guaranteed 4% (which has traditionally been the case), the beneficiary receives the difference between 4% and the actual return achieved in the “13th check.” For example, in 2011, AAFMAA achieved a 5.2% NYA, resulting in the 13th check (sent on May 1st each year) being 1.2% times balances.
At the time of death, AAFMAA sends out a Settlement Options Form to explain the options and ensure that all actions taken by AAFMAA are clearly disclosed and understood by the beneficiary.
| Life Annuity |
Fixed monthly payment for life
Amount is gender and age dependent – the younger the beneficiary, the smaller the monthly amount
Guaranteed minimum interest rate (currently 4%)
Payments stop upon the beneficiary’s death
Not available for a Trust
Once selected, this Settlement Option cannot be changed
Minimum net death benefit must be $10,000 for these options
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| Life Annuity 10, 15 or 20 Years Certain |
Lifetime of monthly payments with a minimum of 120 payments (10 years), 180 payments (15 years) or 240 payments (20 years)
Amount is gender and age dependent – the younger the beneficiary, the smaller the monthly amount
Guaranteed minimum interest rate (currently 4%)
If beneficiary dies before all payments are made, the remainder will be paid to the estate of the beneficiary, unless otherwise specified
Not available for a Trust
Once selected, this Settlement Option cannot be changed
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| Interest Only |
Entire proceeds are left with AAFMAA
Monthly payment based upon a guaranteed annual interest yield of 4%
Can withdraw funds up to twice per year, $5,000 minimum withdrawal
Upon beneficiary’s death, remaining death claim is paid to the estate of the beneficiary, unless otherwise specified
Beneficiary may select another Settlement Option at any time
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| Lump Sum |
Entire proceeds are paid in one lump sum
Beneficiary is then responsible for investing the assets
Alternatively, the beneficiary may elect to take a partial lump sum payment and choose one of the above options on the remainder, provided remainder is $10,000 or more
Full amount of the death benefit can be returned for any option provided that:
- The check(s) are returned to AAFMAA within six (6) months of issue date, AND
- Check(s) have not been cashed
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If you need more information about AAFMAA’s Settlement Options, give our Beneficiary Assistance Team a call toll-free at 1-800-522-5221
For information about a Settlement Option unique to AAFMAA ANNUITYLife policy, please CLICK HERE.
NYA
NYA refers to the rate of return on an investment after subtracting all expenses including commissions, costs of purchase, and taxes. A premium that covers the present value of future claims.