Information on Death Benefit Accounts
August 3, 2010
Beneficiaries of proceeds under a TIAA-CREF Life Insurance Company or TIAA life insurance policy1 may select from a number of settlement options, including a "one sum" payment option, which provides the beneficiary the entire policy proceeds in a single payment.
For claim amounts of less than $5,000, TIAA issues the beneficiary a single check for the amount due. Claims of $5,000 or more qualify for a interest-bearing “Proceeds Plus” account payment option. Upon settlement of the claim, the beneficiary receives a Proceeds Plus checkbook, which enables the beneficiary to draw upon the death benefit proceeds by check at any time. Checks may be written for any amount up to entire balance of the account.
TIAA offers competitive rates of interest on Proceeds Plus account funds, which currently pay 4 percent (as of January 1, 2010 ). TIAA annually reviews the interest rate, which is subject to change.
Question & Answers
Are funds held in a Proceeds Plus account insured by the Federal Deposit Insurance Corporation (FDIC)?
Funds in a Proceeds Plus account are backed by the claims-paying ability of TIAA, which holds the highest financial strength ratings from all leading independent rating agencies2. Those funds are not insured by the Federal Deposit Insurance Corporation, however.
What should I do if I would like to invest life insurance proceeds in an FDIC-insured account?
Beneficiaries of TIAA life insurance policies may elect to transfer funds or withdraw funds from their Proceeds Plus account and invest them in a financial institution that offers FDIC insured accounts. For more information and guidance on options for investing your Proceeds Plus benefits, contact TIAA at 800-223-1200.
Recent news reports suggest that some life insurance companies pay beneficiaries a rate of interest on the funds that enable the insurance company to profit. What can you tell me?
The interest rate that is offered for funds held in a Proceeds Plus account is currently 4 percent, which is very competitive with savings rates in the marketplace3. TIAA and TIAA-CREF Life also offer a series of flexible settlement options, including the option to withdraw qualified death benefits in a lump sum.
1Hereafter the mention of TIAA refers to both companies
2A.M. Best Company (A++) as of 12/2009, Moody’s (Aaa) as of 7/2010, Fitch Ratings (AAA) as of 4/2010, Standard & Poor (AAA) as of 5/2010. Ratings are subject to change. There is no guarantee that current ratings will be maintained. These ratings do not apply to variable annuities, mutual funds, or any other product or service not fully backed by TIAA’s/TIAA-CREF Life’s claims-paying ability.
3TIAA and TIAA-CREF Life reserve the right to change this rate periodically.
Life Insurance is issued by Teachers Insurance Annuity Association (TIAA) TIAA-CREF Life Insurance Company, 730 Third Avenue, New York, NY 1001
