ANNUITYLife
| Who the Policy is For |
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Generally for older members who may not meet AAFMAA’s medical underwriting requirements, but wish to purchase a policy with the option to annuitize the cash value.
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| Policy Features |
A specially designed Net Single Premium Value-Added Whole Life policy
The Net Single Premium is $817 per $1,000 of death benefit ($10,000 - $800,000 coverage)
Cash values and death benefits grow based on the actual crediting rate currently –6.8% for 2012 – (not guaranteed, subject to change)
Guaranteed crediting rate of 4% (4.5% less 0.5% charge for mortality and expenses)
Policy can be approved regardless of age, sex, or nicotine use
No medical records or physicals are required
Option to annuitize immediately, at a future date or never
If the cash value is annuitized, monthly payments are guaranteed until age 100
Present value of the remaining payments are payable to the beneficiary if death occurs before age 100
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All ANNUITYLife policies are Modified Endowment Contracts(MECs) and subject to TAMRA. The insured must not be in a hospital, confined to a bed or have a known terminal illness expected to result in death within two years of issue. The policy is subject to standard two-year contestability and suicide clause.
Net Single Premium
The amount of money that must be collected at the time of issue in order to meet the benefits to be paid later (present value of expected benefits).
TAMRA
TAMRA is the Technical and Miscellaneous Revenue Act of 1988. It imposes additional limits on the funding of an insurance contract.
MEC
MECs are the result of paying too much funding premium into an adjustable life policy in too short a period (usually in the first 7 years). When a policy becomes an MEC, the tax status of death benefit is unaffected and any policy build up continues to grow tax deferred. However, any withdrawal of cash values prior to the insured's age 59 ½ will be subject to a 10% penalty. Additionally, withdrawals from the policy are taxed on the LIFO tax basis meaning the cash value “last in is the first out” therefore generating an instant taxable event.