Beneficiary Designation Information
Designating your beneficiary on a life insurance policy is one of the most important parts of the policy. After all, the reason you are buying the policy is to provide the financial assistance needed to your survivor(s). Only the policy owner is authorized to designate and change beneficiaries. The owner may designate any individual(s), legal entity or estate. The owner may change the beneficiary designation at any time prior to the death of the insured and without the consent or knowledge of the beneficiaries. If the prior designation contains an irrevocable beneficiary, that beneficiary must approve the change in writing. In cases of a court order, an amended court order must accompany the Beneficiary Change form.
Beneficiary changes must be made in writing, and are effective on the date signed by the owner, after receipt and written approval by AAFMAA. AAFMAA is not responsible for any payment or other action taken before approval. Beneficiary Designation forms are available on the AAFMAA website. They form can be filled out online, but must be printed, signed and dated. The form can then be mailed, scanned and emailed, or faxed to AAFMAA. When faxing Beneficiary Designation forms, please fax to Policy Services toll-free at 1-888-210-4882. If e-mailing, please send to firstname.lastname@example.org. If you do not receive written approval within 30 days of sending the completed and signed form to AAFMAA, please contact Policy Services.
Helpful tips when designation a beneficiary:
Individual -- Must be identified by full name, Social Security Number (SSN), and relationship to the insured, unless designating all children. All children does not include step-children unless they are legally adopted.
Full Name: Jane A. Smith
All children, born or adopted.
Full Name: Mary E. Smith, Irrevocable
Relationship: Former Spouse
All children born of marriage to Jane A. Smith
Legal Entity -- Must be identified by full legal name, address and Taxpayer Identification Number (TIN). Trusts must include trust name, date signed and name and SSN of the trustees. If a trust is designated as beneficiary, payment will be made to the surviving named living trustees. AAFMAA is not bound by the terms of the trust or liable for the disposition of the benefit by the trustees.
Name: ABC Alumni Association
TIN: 98-7654321 N/A
Location: City, State Zip
Successors: John E. Smith Trust Dated 13 May 2000 12-3456789; Jane A. Smith, Trustee, or successor 123-45-6789
Testamentary Trust: None
Trustee under the will of the insured
Periodic payments are an option for beneficiaries who receive a death benefit of $10,000 or more. AAFMAA manages the death benefit at a guaranteed return. Beneficiaries are paid monthly at the guaranteed rate, plus an annual bonus check (not guaranteed) for actual earnings above the guaranteed return. Settlement options can be designated by the policy owner, or by the beneficiary at settlement.
A. Life Annuity -- Monthly payments for the lifetime of the beneficiary, regardless of how many payments are made.
B. Life Annuity with 10 years certain -- Monthly payments for the lifetime of the beneficiary, but not less than 10 years. In exchange for lower payments, beneficiaries are guaranteed 120 payments (10 years). If a beneficiary dies before 120 payments are made, the unpaid amount is paid to the estate of the beneficiary unless otherwise specified.
C. Interest Only -- Death benefit is kept and managed by AAFMAA. Monthly payments are paid to beneficiaries. Beneficiaries can withdraw all or part of the unpaid benefit (at least $5,000 no more than twice a year), unless previously restricted by the policy owner. Upon the death of the beneficiary, the remaining death claim will be paid to the estate of the beneficiary unless otherwise specified.
D. Lump Sum -- Entire death benefit is paid to beneficiaries.
AAFMAA's Beneficiary Designation form has two options that may need some further explanation. They are "per stirpes" and "common disaster."
If a deceased beneficiary has (a) living children, divide that share equally between them, or (b) living children and/or descendents of deceased children, such descendents take by representation. For example, Joan is the Insured. She has two children, Jane and Bob. Jane has three children. Bob has none. Jane dies before her mother Joan. When Joan dies, Bob would receive 50 percent of the death benefit and Jane's three children would share the other 50 percent equally. A per stirpes designation takes precedence over a contingent beneficiary designation.
If the common disaster clause is selected, at the insured's death the primary beneficiary(ies) must survive the insured by a specified period (up to 30 days) in order to receive the policy proceeds. Otherwise, the policy proceeds will be paid as though the primary beneficiary died before the insured.