|Who the Policy is For
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.
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 2013 – (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
|Policy Settlement Option
A Settlement Option is only designated if the policy owner annuitizes the cash value of their ANNUITYLife policy
Two options are available at time of annuitization:
- Individual annuity to age 100.
- Payments are calculated based upon insured’s current age and guaranteed until age 100.
- Present value of the remaining payments are payable to a beneficiary if death occurs before age 100.
- Joint and Survivor Annuity
- This annuity is limited to the insured and his or her spouse.
- Initially, this option pays regular payments to the joint couple.
- At the time of one of the spouse’s death, the payments continue to be paid with a guarantee that the surviving spouse will receive the same annuity amount for the remainder of his or her life.
- At the death of the last surviving spouse, the annuity is terminated with no residual payment to a beneficiary.
- The annuity amount is age and gender dependent. Once an annuity is selected and started, the decision cannot be changed.
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 is the Technical and Miscellaneous Revenue Act of 1988. It imposes additional limits on the funding of an insurance contract.
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.