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Did You Know You Can Convert Your Level Term I Coverage into Permanent Insurance?

One of the many features of AAFMAA's Level Term I policy is a guaranteed conversion option to Value-Added Whole Life (VAWL). The Level Term I policy may be converted to a VAWL policy, without evidence of insurability for a face amount not to exceed the death benefit in force on the date of conversion. The premiums for the converted policy will be based on the Insured's age, nicotine use status, and current VAWL premiums.

Premiums for whole life insurance are higher than those for term because of the nature of the policy. It is permanent insurance with cash value accumulation and eventual death benefit growth. It also includes 100% money back guarantee, Long Term Care Settlement Option, and the opportunity for loans against the cash value. While you may not be able to convert all of your $600,000 policy for example to a Value-Added Whole Life because of the cost (which, for a 30-year old female non-nicotine user, would cost $298.80 per month); you may want to consider converting part of it. Here's an example:

A 30-year old non-nicotine female wants to convert some of her $600,000 Level Term I policy to Value-Added Whole Life before age 50. She will resign her Level Term I policy when she turns 50 and continue the VAWL policy for life. Here are some of her cost options, keeping a total of $600,000 of coverage until age 50:

Level Term I Kept Monthly premiumAmount Converted to VAWLMonthly VAWL premiumTotal Combined Monthly Premiums*
$575,000$26.00$25,000$17.05$43.05
$550,000$25.00$50,000$29.30$54.30
$525,000$24.00$75,000$41.55$65.55

*Total for premiums until resignation of Level Term I policy; then premiums would decrease as only VAWL would be in force.

The Value-Added Whole Life policy will continue to grow as the cash value accumulation can support higher death benefits. The premium will NEVER increase and the initial face amount is guaranteed. AAFMAA?s current crediting rate for 2007 is 7.1%. Using this crediting rate, here is a projection of how the $75,000 VAWL policy could potentially grow over the years, specifically at age 60, 70, 80 and 90. Crediting rates are not guaranteed and are established annually.

chart

For more details, please call a Membership Coordinator toll-free at 1-877-398-2263, or fill out an online form and a Membership Coordinator will contact you.

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