Permanent insurance for permanent needs Share Written By AAFMAA Team Tags AAFMAA Resources Life Insurance AAFMAA 2014-01-20 Benjamin Franklin was the first of many to say, "'In this world nothing can be said to be certain, except death and taxes." Permanent Life insurance is a sure way to address the certainty of death—and it can actually help a bit with taxes too! Most AAFMAA policy holders under 60 have term insurance (such as AAFMAA’s Level Term I, Level Term II or Renewable Term insurance). Those policies are great because they provide a relatively large death benefit for the lowest possible premium—much less than comparable SGLI or VGLI policies in nearly every case. They provide a large amount of insurance protection against the loss of income when someone is in their prime earning years. Nearly everyone, however, also needs insurance after those term policies expire. That is where permanent or “Whole Life” insurance comes in. Whole life insurance has no expiration date—it will cover you and pay your beneficiaries whenever you die. Everyone has final expenses: funeral costs, legal bills, distributing property, debt settlement, required taxes, and other expenses. Whole life insurance ensures that funds will be immediately available so that your family won’t have a financial burden when you die. Whole life insurance, especially AAFMAA’s Value Added Whole Life policy, also provides other substantial advantages. Value Added Whole Life policies build cash value every month, currently receiving AAFMAA’s high crediting rate of 6.5% in 2015 (not guaranteed). As your cash value grows, you can borrow up to 75% of your policy’s cash value as a tax-free loan. The premiums for a whole life policy are fixed and can never be increased. The Death Benefit is guaranteed and, depending on the cash value growth of the policy, can even increase over time. And the death benefit generally passes tax free to your beneficiaries. Beyond those characteristics of whole life, AAFMAA’s Value Added Whole Life has three unique features that are particularly valuable: 1) In addition to the high crediting rate, AAFMAA provides a 100% money-back guarantee throughout the life of the policy. Unlike many other companies with high surrender charges, AAFMAA will refund 100% of all premiums paid or provide you the cash value of the policy—whichever is greater! There are no surrender charges. 2) AAFMAA whole life policies also have a Long Term Care Settlement Option. With an AAFMAA whole life policy, if you have a chronic illness, you can have your entire death benefit paid out—while you are still living. This is permitted to be paid tax free, up to the IRS limit (currently $330 per day). Some AAFMAA members find that considering whole life insurance, with a long term care settlement option, is a great alternative or supplement to long term care insurance. (See http://www.aafmaa.com/BrowseProducts/LifeInsurance/LongTermCareSettlementOption.aspx for more details) 3) Finally, the most important reason for permanent insurance is so that your family will have AAFMAA’s exclusive survivor assistance services to ensure that they receive all of their benefits, no matter when you die. For all members with life insurance policies, AAFMAA’s survivor assistance experts will work with Social Security, the Veterans Administration, DFAS, and others to ensure that your family gets everything that they deserve. It is for all these reasons that members frequently retain their large term insurance policy to protect against loss of income and then get a smaller whole life policy (from $10,000 to $100,000) to ensure that they have permanent protection for a life time. It makes good financial sense to start your whole life policy now—when your age and good health will usually get you the best rate. For example, for a male getting a $25,000 whole life policy, a 30 year old would only pay $17.05 per month. That rate would climb to $31.25 at age 45, to $48.30 at age 55, and $75.15 at age 65. So it is much better to start early. AAFMAA also has plans where you can pay just a bit more per month so that the policies are completely paid for after just 20 or 30 years. Permanent life insurance should be an essential part of everyone’s financial plan. It will ease the financial stress when you die and provides important benefits while you are alive. You can get a quote and apply on line at www.aafmaa.com or contact a membership coordinator at (877) 398-2263 or firstname.lastname@example.org for more details.