How do I become a member?
You become a member of AAFMAA when you purchase your first life insurance policy or service, such as Premier Services or Wealth Management & Trust Services.
What is my membership number?
Your AAFMAA membership number can be found on your membership card. If you’re having trouble finding it, please give us a call toll-free at 1-800-336-4538 weekdays from 8:30am to 5:30pm ET. If you’re calling between 5:30pm and 7:00pm ET, please call a Membership Coordinator toll-free at 1-877-398-2263.
Is my death benefit taxable to my beneficiary?
No - the beneficiary receives the death benefit income tax free. There may or may not be an estate tax payable.
How can I change my beneficiary?
Your beneficiary of record appears on the Annual Statement you receive for each policy. If you would like to change your beneficiary, just download the form and either email it to firstname.lastname@example.org, fax to 1-888-210-8201 or mail to 1856 Old Reston Avenue, Suite 200, Reston, VA 20190.
What happens if my beneficiary is a minor?
Unfortunately, we won’t be able to pay the claim until we receive legal documentation - usually a court order - informing us whom to pay. Keep in mind it’s a good idea to seek legal advice when naming a younger beneficiary.
What is my CAP Loan Balance?
Your loan balance (as of the statement period) is indicated on the bottom of your Annual Statement. For more current information on loan balances, login to the Member Center. The loan balance appears with your policy information.
How secured are my digitized documents?
With the goal of securing AAFMAA’s online business activities, AAFMAA complies with the Federal Information Security Management Act (FISMA) and has established security measures in the application environments.
AAFMAA imparts controls into the IT systems life-cycle to ensure the confidentiality, integrity, availability, and non-repudiation of information. Data is safeguarded using industry standards and best practices. Data classification and retention programs are in place and applied encryption techniques are used. AAFMAA extensively utilizes Secure Sockets Layer (SSL) and security software, protocols and devices within the operational infrastructure to provide protection to AAFMAA websites, systems and data.
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Which browsers do the Member Center support?
To best view the Member Center, make sure you are using one of the following Browsers:
Is the Member Center secure?
Yes, the Member Center is accessible only through Secure Sockets Layer (SSL). SSL encrypts all of the data that is transmitted from your computer to the server with 128 bit encryption. If you’re using Internet Explorer, you’ll also notice a padlock icon at the bottom right of the window indicating the site is secure.
What is my customer number?
The customer number is also referred to as your "member number.” It’s provided on your Membership Card you received when your initial policy was issued. It’s also the first 4-6 numbers of your insurance policy. The customer number contains numbers only. For example, policy number 123456-1 would have a customer number of 123456 – no dashes and no extra numbers.
Where can I get my policy number?
Your policy number is provided on your Certificate of Insurance, which you received upon approval of your application. It’s also located on your Annual Statement.
What if I don’t have an email address?
You’ll need to maintain an email address in the Member Center in order to have online access. This email address will be used to communicate changes and updates to your online information as well as be used for password or login ID retrieval. Free email accounts are available from Google, Yahoo, Hotmail as well as other sources.
Who receives an annual statement?
An owner of an AAFMAA life insurance policy issued prior to February of the previous year will receive an annual statement.
How do I receive my annual statement?
All Annual Statements are posted on line in the Member Center and are always available there. Most new AAFMAA members have elected to receive their annual statements though the Member Center. If you prefer paper delivery, in the Member Center just select “Account Profile,” then “Delivery Preferences,” and you can decide whether your statements are provided online or through the mail.
Why do I receive a separate statement for each policy?
We’ve looked at the costs, benefits and risks of consolidating statements and we currently consolidate statements for members with more than five AAFMAA policies. For those with fewer than five policies, we send separate statements to ensure that no one receives another member’s statement. We will always continue to monitor operating costs and search for the lowest cost, which will not compromise a policy owner’s privacy.
No. The beneficiary receives the death benefit income tax free. There may or may not be an estate tax payable.
If you would like to change your beneficiary, just download the form under the Decision Center tab choose Downloadable AAFMAA Forms. Print the Beneficiary Designation Form, complete, sign, date and either email it to email@example.com, fax to 1-888-210-8201 or mail to 1856 Old Reston Avenue, Suite 200, Reston, VA 20190.
What happens if my beneficiary is a minor and not of majority age?
In such a case, AAFMAA will not be able to pay the claim until we receive legal documentation, usually a court order, informing us whom to pay. Before naming a younger beneficiary you should seek legal advice.
If you participate in the Career Assistance Program, your loan balance, as of the statement period, will be indicated on the bottom of your statement. For more information on loan balances, please contact Policy Services at 1-800-336-4538.
Why didn’t my death benefit increase this past year?
There are two reasons why your death benefit may not have increased this past year:
1. Recently issued policies must typically be in force for several years before the policy’s cash value reaches the point at which the death benefit begins to increase.
2. Older policies that have experienced artificially high growth in the past may have been converted to a more conservative basis for cash value, temporarily causing the death benefit to stop increasing.
Death benefit increases will resume when the cash value growth is sufficient to support an increase in the death benefit again.
How is the monthly increase in my cash value computed?
Three factors affect cash value increases:
1. Premiums: All premium payments are added to the previous month’s cash value.
2. Expenses: Deductions for administrative costs, acquisitions costs, services costs, and mortality costs are subtracted.
3. Cash Value: After premium, if any, is added and expenses are deducted, the balance of the cash value is credited with the monthly equivalent of the current annual crediting rate to create a new cash value amount.
What is a negative contingency fund reserve adjustment?
Adjustments to your policy’s portion of AAFMAA’s contingency fund reserves may be required to cover the unamortized acquisition costs of establishing your policy or to insulate the Association from the effects of short-term fluctuations in mortality and investment experience.
How can I access my ANNUITYLife cash value?
You can access your ANNUITYLife cash value by cash surrendering your policy and receive all of your money back—both premium paid and interest earned—at any time. If you receive the funds before you are age 59½ you may have to pay a 10% penalty on the interest earned. You can also elect to convert an ANNUITYLife policy into a lifetime annuity payment to age 100. If you don’t live to age 100, the present value of the remaining future payments will be paid to your beneficiary.
What are the potential tax implications?
If you decide to cash surrender one of several ANNUITYLife policies purchased during the same calendar year, you will have to pay taxes on the interest earned for all of the policies with that first policy. When you cash surrender subsequent policies, since you have already paid some or all of the taxes, you will pay less tax on the gain for those policies. Ultimately the amount of total taxes if the polices are surrendered will be roughly the same, because the tax basis of the subsequent policies will be increased to reflect the taxes already paid. This will not have an impact on policies that are annuitized, if all polices surrendered simultaneously, or in the event of the policy owners death.
What are my ANNUITYLife guarantees?
Your ANNUITYLife policy is guaranteed to earn a minimum crediting rate (specified in your policy) less administrative charges for mortality and expenses. As a life insurance policy it 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.
What are my Value-Added Whole Life guarantees?
Your Value-Added Whole Life policy is guaranteed over the life of the policy to earn a minimum crediting rate (specified in your policy) less charges for mortality and expenses. The initial death benefit is guaranteed for your life. Your 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.
How can I access my Value-Added Whole Life cash value?
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 firstname.lastname@example.org or sent to 1856 Old Reston Avenue, Suite 200, Reston, VA 20190.
Is there a single premium payment option?
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.
Can AAFMAA forecast how my cash value and death benefit will grow?
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 and growth based on our current crediting rate (adjusted annually and not guaranteed). You must apply for an additional policy to increase the Death Benefit on the policy.
What is the difference between the cash value and the death benefit for beneficiaries?
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.
How does my cash value increase?
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.
AAFMAA Life Insurance Administrative Transaction Fees
What are the administrative transaction fees associated with my policies?
Insurance policy loans (whole life policies only):
Cash surrender of a whole life policy:
Insurance claim settlements:
Exercise of Long Term Care Settlement Option (LTCSO) (whole life policies only):
All fees are subject to change without notice.
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What is Wealth Builder Life Insurance?
Wealth Builder Life Insurance is a Net Single Premium Value-Added Whole Life insurance policy with a graded death benefit in the first two years it is a Modified Endowment Contract (MEC) and
subject to TAMRA rules. If over age 59- 1/2 the 10% IRS penalty does not apply. Wealth Builder Life Insurance also includes an option to annuitize the cash value for monthly payments to age 100 immediately, at a future date, or never
What is the net single premium?
Wealth Builder Life Insurance has a net single premium of $780 per $1,000 of death benefit, with a minimum of $10,000 coverage.
What does my single premium buy me?
Wealth Builder Life Insurance pays a graded death benefit - 85% of the face amount in year one, 90% in year two, and 100% each year after that
For whom is Wealth Builder Life Insurance best suited?
Generally, it is suited for older AAFMAA Members interested in growing cash value while getting valuable life insurance, even if they might not meet medical underwriting requirements for a standard permanent policy. However, people of any age can qualify.
What is the crediting rate?
The cash value and death benefit grow based on AAFMAA’s present crediting rate, currently 5.75% for 2019, minus an administrative cost (currently 0.75%, for mortality and expenses). Those rates are NOT guaranteed and are subject to change. The guaranteed minimum crediting rate is 3.5% (less 0.75% administrative cost, for a net guaranteed return of 2.75%).
Are there any medical requirements?
The policy requires no medical records or physicals. Applicants do not undergo extensive medical underwriting. You must be able to answer “no” to three questions on the application:
The policy is subject to standard two-year contestablity and suicide clauses.
What happens to the policy if I annuitize the cash value?
Once you annuitize the cash value, the life insurance policy and death benefit terminate and monthly payments (guaranteed to age 100) begin.
What happens if i die before age 100 after annuitizing?
Upon the Insured’s death, AAFMAA pays the present value of the policy’s remaining cash value to the beneficiary in a lump sum payment.
In summary, Wealth Builder Life Insurance:
For more information about Wealth Builder Life Insurance and to apply, call an AAFMAA Membership Coordinator at 877-398-2263.
What is a Modified Endowment Contract (MEC)?
When premiums are paid into a life insurance policy more quickly than normal (usually less than 7 years), the policy is still a life insurance policy but it is considered a Modified Endowment Contract, or MEC, by the IRS.
How does a life insurance policy become a MEC?
Under the Technical and Miscellaneous Revenue Act of 1988 (TAMRA), the federal government limits the amount of money that can be paid into a life insurance policy within the first 7 years from the date of issue. This is referred to as the 7 Pay Test. If the amount paid within the first 7 years exceeds the limit, the policy will be classified as a MEC.
Are Single Premium policies considered MEC’s?
Yes. TAMRA makes any net single premium life insurance policy, such as AAFMAA’s Wealth Builder Life Insurance and Single Premium Value Added Whole Life policies, a MEC.
How is a MEC taxed?
Gains are taxed first for any withdrawals, either by loan or cash surrender, under last in first out (LIFO) accounting. The cost basis is not taxed however it will be considered the last money to come out of the MEC for tax purposes. The gain is taxed as ordinary income to the owner
Are there additional penalties for withdrawals?
Yes. Any withdrawals before age 59 ½ is subject to a 10% penalty on the amount of any gain.
Is the Death Benefit taxed?
The death benefit of a MEC can still be passed to beneficiary’s tax free.
Can a MEC be reclassified as a life insurance policy?
Once a life insurance policy is classified as a MEC, it cannot be changed back to a non-MEC policy.
Are there any implications if I have multiple MEC policies as opposed to a single, larger policy?
The IRS considers Wealth Builder Life Insurance, or any other MEC policy, issued by the same insurer to the same policyholder during the same calendar year, to be aggregated when determining the amount of any distribution that is taxable.
What are the potential tax implications of having multiple MEC policies?
If you decide to cash surrender one of several policies purchased during the same calendar year, you will have to pay taxes on the interest earned for all of the policies with that first policy. When you cash surrender subsequent policies, since you have already paid some or all of the taxes, you will pay less tax on the gain for those subsequent policies. Ultimately the amount of total taxes if the polices are surrendered will be the same, because the tax basis of the subsequent policies will be increased to reflect the taxes already paid. There will be no impact on policies that are annuitized, if all polices surrendered simultaneously, or if the policy owners dies.
Does a MEC policy, such as Wealth Builder Life Insurance make sense?
YES - Although these policies have a slightly reduced tax benefit if they are cashed in separately, they still serve as a stable retirement planning tool. They are good alternatives to annuities, which immediately become taxable upon the death of the owner. All AAFMAA life insurance benefits pass tax-free to heirs. Wealth Builder Life Insurance can be appropriate for members who do not qualify for other insurance products, for members looking for a way to leave a tax-free inheritance to family members, or for members who wish to annuitize their policies and receive a steady stream of income for the remainder of their life.
For more information, please contact a membership coordinator today at 1-877-398-2263. The information provided in this FAQ should not be construed as specific tax advice. Please consult a qualified tax advisor for more information.
What is AAFMAA Wealth Management & Trust (AWM&T)?
AWM&T is a state-chartered trust company that provides financial planning, investment management and trust services to the American Armed Forces, whether active duty, retired or honorably discharged veterans.
Why choose AWM&T?
We are wholly owned by AAFMAA and, like our parent, AWM&T is a not-for-profit, tax-exempt organization. Our net income above expenses goes back to AAFMAA and ultimately back to the members. We only serve military clients and promise you that you’ll always have a personal contact with us – never a call center.
I don’t have a trust. Can AWM&T still manage my investments?
Accounts do not have to be trusts to receive investment management services. We provide investment management for both taxable and non-taxable (IRA, Roth) investment accounts.
Can I have a financial plan prepared without having an account with AWM&T?
Yes. Financial planning is offered separately from investment management or trust services.
What are your fees?
AWM&T is a fee only financial planner and investment manager. We do not charge commissions. We believe this eliminates the inherent conflict of interest that exists if you use a broker who is compensated by selling commission based products.
Comprehensive financial planning is offered at a flat fee. Investment management and trust services are charged an annual fee based upon a percentage of assets under management. Our fee structure is posted at www.aafmaa.com/wealthmanagement.
How is AWM&T different from a stock broker?
We are a state chartered and regulated trust company. This means that we have a fiduciary obligation to place our clients’ interests first, ahead of our own. A stock broker does not have to meet this standard.
Are my assets secure?
All client assets are held by an independent custodian. Your money is never commingled with the assets of AWM&T or AAFMAA. Our custodian, Northern Trust, currently has custody of over $6.1 trillion in assets. In addition, AWM&T has full insurance coverage and the backing of AAFMAA.
Can AWM&T prepare estate planning or trust documents for me?
No. We cannot practice law and cannot draft any documents for you. We would be pleased to provide recommendations for counsel.
Can I name AWM&T to serve as my trustee in the future?
Yes. We can be named to start serving as your trustee upon your death or disability.
Can AWM&T serve as trustee in every state?
Our trust charter allows us to serve as trustee in 40 states. Please call us to discuss your particular situation.
How do I contact you?
Please call us at 910-307-3500 for our Fayetteville NC office, 703-707-8020 for our Reston VA office or 407-636-8112 for our Winter Park FL office or toll free at 800-522-5221. Our email address is email@example.com.
Where is AAFMAA Mortgage Services (AMS) available? AMS is available in the following states: Alabama, Connecticut, Delaware, Florida, Indiana, Kansas, Maryland, North Carolina, Oklahoma, Pennsylvania, Rhode Island, Tennessee, and Virginia.
If you have any questions, please visit www.aafmaa.com/mortgage , email us at firstname.lastname@example.org, or call us at 844-422-3622.
Please contact us if you are aware of any unauthorized use of AAFMAA material (like digital products/website content etc.). These are protected by copyright and trademark law. Please contact us at email@example.com
Is AAFMAA protected against Ransomware?
Yes. Thanks to AAFMAA’s investment in cyber-security and our MetroStar partners, all of AAFMAA’s computers, servers, and networks are fully protected and should not have any issues.
What is the WannaCry Ransomware Attack??
According to numerous open-source reports, a widespread ransomware campaign is affecting various organizations with reports of tens of thousands of infections in as many as 99 countries, including the United States, United Kingdom, Spain, Russia, Taiwan, France, and Japan. The software can run in as many as 27 different languages. The latest version of this ransomware variant, known as WannaCry, WCry, or Wanna Decryptor, was discovered the morning of May 12, 2017, by an independent security researcher and has spread rapidly over several hours, with initial reports beginning around 4:00 AM EDT, May 12, 2017. Open-source reporting indicates a requested ransom of .1781 bitcoins, roughly $300 U.S.
How can I stay protected against WannaCry Ransomware?
AAFMAA recommends that you double check your settings on all computers. Be sure that you are doing the software updates to have the latest security patches installed—or better yet, accept the default settings and have your computer install them automatically. Also ensure that anti-virus and anti-malware solutions on your computers are set to automatically conduct regular scans.
All our online services through which we enable access to your accounts are not susceptible to this vulnerability.
OpenSSL is a technology used to secure web connections. The vulnerability is created by a software bug now commonly referred to as Heartbleed. A Heartbleed intrusion can enable access to sensitive information valuable to cyber criminals in order to compromise the website.
To protect AAFMAA member's members’ accounts and other sensitive information, AAFMAA employs multiple layers of security. Our Information Security Team has reviewed the protections in place and verified that all online services through which we enable access to your accounts are not susceptible to this vulnerability. You may continue to use our websites for online access to your accounts without concern.
In addition to our aggressive cyber security protection measures, we advise and encourage our members to:
We thank you for choosing AAFMAA for your insurance and services needs. If you have any questions about this, please contact us at firstname.lastname@example.org
All the tools to know exactly what coverage you need
Put your family at ease
LTC. Alvaro G.
U.S. Army (Retired)