One of the most significant advantages of being an Armed Forces Mutual Member is the peace of mind that comes from knowing your survivors will be supported through the financial security provided by your life insurance policy and our exclusive Survivor Assistance Services. Armed Forces Mutual continually strives to expand the value we offer to our Members and their families, especially during life’s most difficult moments.
To further strengthen this commitment, we are proud to announce an additional new settlement option designed to increase financial confidence: the Cash Reserve Account (CRA) delivered by AAFMAA Wealth Management and Trust LLC (AWM&T), a wholly-owned subsidiary of Armed Forces Mutual.
The loss of a loved one is an emotionally taxing time, and navigating major financial decisions in the immediate aftermath can add unnecessary stress. We’ve developed the CRA with this in mind, to offer beneficiaries the ability to delay making decisions about the use of the death benefit proceeds, while still enjoying the safety and potential growth of those funds under the management of experienced financial professionals.
Financial Benefits of the Cash Reserve Account (CRA)
This settlement option is designed to provide families with both flexibility and security. The Armed Forces Mutual CRA is a flexible savings option your beneficiaries can select to help manage cash reserves while earning interest. Similar to a savings account, it allows them to hold liquid assets in AWM&T-approved money market instruments, providing an alternative to standard investment models. The CRA also enables life insurance beneficiaries to manage insurance proceeds securely, giving them the opportunity to achieve growth comparable to U.S.-based money market rates.
Funds in the CRA are held in a U.S. government money market fund that aims to generate income while maintaining stability of principal by investing in a portfolio of U.S. Treasury and other securities fully collateralized by the U.S. Treasury. While money market rates fluctuate based on market conditions, namely the federal funds rate, the CRA is designed to provide competitive rates.
Using the CRA
If your beneficiary chooses to receive their life insurance payout through this option, they will benefit from easy access to their funds, competitive interest rates, and none of the management fees typically associated with investment accounts, making it a cost-effective option for liquidity.
To establish a CRA, your beneficiary will simply complete the CRA Investment Management Agreement and provide the necessary documentation outlined in the Armed Forces Mutual Claim Form instructions. The CRA is administered by AWM&T, ensuring professional management of funds. Once the account is set up, your beneficiary will receive regular updates about it through monthly electronic statements, as well as an annual statement detailing account activity.
The only fee associated with a CRA is an annual fee, assessed monthly, to keep the account open and funded. This fee of 1/10 of one percent, or 10 basis points, is assessed at the CRA level internally so no additional payment action is required. Interest received in CRAs may be taxable as ordinary income, and relevant tax information will be provided via IRS form 1099. The beneficiary can make withdrawals from the CRA at any time, up to the entire account balance, with prior written and verbal authorization.
Should your beneficiary decide to change their settlement option later, they can do so at any time, including switching to receive a lump sum directly or through another method. However, it’s important to remember that choosing CRA over a lump sum payment provides security and the potential for growth through interest earnings, making it an excellent choice for those who want to take their time deciding how to use their funds.
Making the Best Financial Choice
The option of a CRA represents another step in Armed Forces Mutual’s mission to support the military community — not just throughout military life, but beyond. By offering tools that encourage thoughtful planning and reduce emotional and financial strain, we help ensure your legacy continues to provide for the people who matter most to you, when you’re no longer here to do so yourself.
To learn more about your life insurance options and how your beneficiaries can use the CRA, contact an Armed Forces Mutual Membership Coordinator at 877-398-2263 or visit armedforcesmutual.com/life.