WINTER 2015 AAFMAA Advantage AMERICAN ARMED FORCES MUTUAL AID ASSOCIATION NEWSLETTER “AAFMAA 2020” — A Strategic Vision in Focus Do you remember where you were on New Year’s Eve military to achieve their financial independence, our vision before the clock struck year 2000? You may have been for 2020 needed to address all three areas. worried about the Y2K problem; listening to top hits by Cher or Whitney Houston; or preparing to watch the St. Insurance Louis Rams beat the Tennessee Titans in the Super Bowl. Previously, AAFMAA only offered one insurance product, a Meanwhile, AAFMAA was laying out its vision for the next permanent or “whole life” life insurance . and that only in a twenty years, what we call “AAFMAA 2020.” We set out small amount. “AAFMAA 2020” recognized that we needed a grand vision to empower the military community with larger policies and different types of policies to meet the the financial solutions to achieve financial security and needs of members at every stage throughout their careers. independence. We now offer a full complement of insurance policies: To achieve this, we looked at the unique case of a military • Level Term I – Up to $800,000 in term insurance for 34% member’s life, built upon a solid foundation of earned less than SGLI for ages 18 to 50 (age 40 smokers). entitlements: VA Benefits, Military Retirement and Social Security. Built on this foundation, servicemembers then have • Level Term II – Term insurance for up to 30 years to age three areas of personal finance that support their long-term 85, with affordable, level premiums. financial success:Insurance , Investments, and Home Equity. • Renewable Term – Term insurance similar to VGLI, but AAFMAA recognized that if we were going to empower the usually much less expensive. • EZ Term – Up to $100,000 term insurance with a simple, quick application process and no physical exam. • Value Added Whole Life – Permanent insurance that Financial Independence of Military Families builds cash value at a high crediting rate (6.0% for 2016) and a 100% premium return guarantee. • ANNUITYLife – Grows at a generous crediting rate (6.0% for 2016), with option to cash in or annuitize the policy at any time. LIFE INVESTMENTS HOME INSURANCE EQUITY • Generations Plus – Affordable whole life coverage that includes guaranteed ability to expand insurance. We have enhanced the features of our whole life policies, including adding a Long Term Care Settlement Option and retroactively extending that option to all existing whole life VA BENEFITS | SOCIAL SECURITY | MILITARY RETIREMENT policies. INSIDE 4 2014 Annual Meeting Minutes 7 Whole Life Financial Preparedness 6 Deutsche Bank Salutes USO on 7 Remembering William Clark Behalf of AAFMAA 1 8 Contacting AAFMAA WINTER 2015 | AAFMAA Advantage FOR MEMBERS We see outstanding results: Since 2000, we have increased a $1,000 initial investment and requiring an additional $250 lives insured from 62,251 to 102,971, including increasing per month. numbers of spouses and children. Those lives are protected by 124,766 insurance policies, which is up from 85,867 in Home Equity 2000. Our insurance-in-force has grown thirteen-fold from As AAFMAA protects lives with life insurance and grows $1.9 billion to $25.7 billion. All of this supports your personal assets through investment our vision to better protect the American strategies, AAFMAA’s vision recognizes Armed Forces and their families, providing LIVES INSURED that the largest single source of wealth for financial independence through insurance. many servicemembers remains the equity built through home ownership. With more Investments Today: military families moving off post and fac- While insurance is necessary, it is not suffi- ing the complex environment of mortgage cient for the financial independence of the lending, AAFMAA members need a reliable military. We know that military families must 102,971 organization they can trust to provide them have an effective way to plan for their finan- excellent, transparent service in obtaining cial future, grow their wealth, and protect it a home loan at the most affordable cost. for generations. In 2012, we created AAFMAA To meet that need, the final major part of Wealth Management & Trust (AWM&T), a “AAFMAA 2020” is the creation of AAFMAA wholly-owned subsidiary of AAFMAA, to do 2000: Mortgage Services (AMS). AMS will open just that. As a North Carolina chartered trust 62,251 in our Fayetteville office in 2016. Initially, company, AWM&T has a fiduciary responsibil- AMS will provide residential mortgages in ity to put the needs of the military member North Carolina, rapidly expanding to Virginia, first, with the highest standards of care, loyalty and trust. Florida and other states. This wholly-owned subsidiary of AAFMAA completes the final pillar of services to facilitate AAFMAA’s trust company provides three critical services to the financial independence of military members. Be sure to help members achieve financial security and independence. watch for future announcements so that you can get the • Financial Planning. Unbiased, fee-only, comprehensive same, superlative personal service that you expect from financial planning to design a road map leading to suc- AAFMAA — now with an extremely affordable mortgage cess. Periodic updates can ensure that members remain that empowers you to purchase your perfect home. on track. Members can use their individualized plan to manage their investments. Vision 2020 Meets 9/11 • Investment Management. For members uncomfortable Like any other plan, “AAFMAA 2020” had to confront managing their own investments, AWM&T will manage unforeseen challenges and overcome them while still provid- the funds — NO commissions, NO in-house ing consistent, excellent service to our mem- products, NO conflicts of interest. From INSURANCE- bers. Soon after we embarked on the vision, small to large accounts, each member ben- terrorists attacked the nation on September efits from seasoned, professional manage- IN-FORCE 11, 2001, and the Nation has sustained the ment. last 14 years at war in Afghanistan, Iraq, and throughout the globe. • Trust Services. For members who want the protection of a trust . whether because Today: AAFMAA adapted to new realities by increas- of age, special needs children, a surviving ing our war and contingency reserves to spouse, or to preserve hard-earned assets $25.7 ensure that we can always fulfill our invio- for a following generation, AWM&T’s expe- late promises to provide benefits for every rienced professionals will ensure that your billion member. In the past 15 years, we have paid wishes and values persist even after you’re over $592 million to the families of ser- gone. vice members and veterans. Our Survivor 2000: Assistance Team has become even more After its launch just three years ago, AWM&T expert in obtaining benefits for members, now has over $245 million in assets under $1.9 billion helping them navigate the challenging maze management. AWM&T provides professional of agencies. The Survivor Assistance Team investment management for these funds, and ensures that each survivor receives every does so at a fraction of the cost of other investment managers. benefit to which they are entitled. We now work with over If money management challenges you, check out AWM&T. 14,500 widows and widowers to ensure that they receive all For active duty members, AWM&T has built the Uniformed of the benefits they deserve — for the rest of their lives at Services Account, which allows service members to benefit no additional cost. from professional investment management, beginning with 2 AAFMAA Advantage | WINTER 2015 FOR MEMBERS In 2000, only several dozen AAFMAA survivors received This continued success has not been achieved easily. In monthly annuity checks from AAFMAA death benefit pay- 2001, we began implementing our digital strategy to fun- outs. Now 531 widows and widowers not only receive a damentally transform every aspect of AAFMAA’s admin- monthly check, but also receive a bonus check every year istration. Automating routine processes has allowed your so that their annual interest rate equals our high Net Yield staff to focus on YOU, not paperwork. Our investment in on Assets, an estimated 4.8% in 2015. In today’s economic automation has leveraged technology to keep costs low. environment, almost no other organization provides such a high rate. Focusing on Members Our Member Benefits Team AAFMAA’s vision for 2020 are experts on the always remains consistent with its evolving VA claims process. founding purpose 136 years They have assisted hundreds ago — to focus on doing of members with their VA everything that we can for disability claims, leveraging our members and their fami- our partnership with Disabled lies. We have expanded eligi- American Veterans (DAV) so bility so that all members of that members can submit the American Armed Forces accurate claims to receive all can benefit from AAFMAA’s the benefits to which they superlative personal service. are entitled. We developed We expanded AAFMAA Premier Services so that new membership to the Navy, non-Grandfathered members Coast Guard, and Marine can take advantage of our Corps in 2011. This has exclusive member benefits increased membership, from 61,444 in 2000 to 89,204 and expertise as well. We also The AWM&T office in North Carolina developed the secure digital today. This 45% growth in vault so that members can membership is particular- access their important doc- ly significant as all military uments any time, anywhere. services continue significant reductions. Now, more mil- Vision 2020 Meets the itary families than ever can Great Recession and benefit from what AAFMAA Financial Repression provides to achieve their financial independence now Beyond the wars, AAFMAA and in the future. has effectively managed its assets through one of the Our progress towards most challenging econom- “AAFMAA 2020” demon- ic periods in history.