What You Should Know About the Life Insurance Claims Practices of Armed Forces Benefit Association
Recently, there has been negative publicity regarding other life insurance companies’ practices that delay payment of death benefits by depositing the proceeds due beneficiaries in a non-insured, low-interest bearing general company account.
Please rest assured that neither AFBA nor 5 Star Life Insurance Company, its underwriter, has ever engaged in any of these practices.
How does AFBA pay the beneficiaries their death benefit proceeds?
An Emergency Death Benefit of up to $15,000 (depending on the amount of coverage then in effect) will normally be mailed within 24 hours after receiving notice of death.
When death benefits are due to the beneficiary of an AFBA member for coverage amounts under $25,000, payment is immediately mailed to the beneficiary once all of the needed documentation is received.
For coverage amounts of $25,000 or more, AFBA offers the beneficiary the option of either receiving a check for the total proceeds due or opening a Money Market Account in his or her name at 5Star Bank, Colorado Springs, Colorado. All 5Star Bank accounts are FDIC-insured up to $250,000 per depositor and offer competitive interest rates.
With a 5Star Bank Money Market Account, the beneficiary receives a Bank checkbook, which allows the funds to be unconditionally withdrawn at any time at the account holder’s discretion.
This is just one more way AFBA and 5Star Life Insurance Company safeguard your financial interests. If you have any questions or concerns, please contact the Claims Department at 800-776-2322.