Your Trust Refund is an important part of your life insurance plan that is provided through AICPA. Our post, Understanding AICPA life insurance trust refunds is key to finding out how to evaluate and compare your plan. Knowing how your refunds lower premium contributions is so important when judging these plans.
Today, we’re going to look into how the AICPA Trust Refunds affects its members and what to do about it. We’ve also put together some additional articles that go over the pros and cons of AICPA life insurance and AICPA Life Insurance Reviews
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aicpa life insurance trust
Why is there a trust fund?
Insurance carriers come up with their rates by factoring in their expenses, claims and a whole bunch of other factors. The AICPA Trust is no different. However, the AICPA is a bit unique in that they have the power to raise or lower premium costs on a yearly basis. This is all based on how profitable the trust is- so your yearly refund can be increased or decreased every year.
When you compare AICPA life insurance premiums to other life insurance companies, be sure to factor in the annual refund. It’s really important to know that the AICPA trust will hold your contributed life insurance premiums up until your refund is given out each year.
This is a pretty big deal.
Why? Well you’re giving up all of the interest that you could have made from the added premium. AICPA calls this “contributions”.
Around the middle of February, the AICPA Trust refunds are given out to all of the trust plan participants. The participants will get a K-1 statement annually.
Are your Life Insurance Rates impacted by the AICPA Refund?
When looking at the AICPA trust refund, you need to know that it isn’t small potatoes with the CPA Life plans. Depending your age, the CPA Life increasing term refund is a whopping 42-57% !!!
The Trust refund is no small amount with the CPA Life plans. In fact, the refund ranges from 42% to 57% with the CPA Life (increasing term), depending on your age bracket. Be sure to visit the most recent refund percentages for every CPA Life plan. Another key point to know is that spouse plans have a decreased refund percentage.
Cash Refund
The cash refund that you receive is a bit alarming. It’s lower (percentage wise) compared to the total premiums you pay for their Level Premium Term.
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Sample Rates
You should always compare some sample rates in order to make sure you’re getting the best bang for your dollar. Let’s now look into some sample rates from a few common age brackets.
Age 35
Sample 20 year term rates for a non smoker 35 year-old woman in good health and a death benefit of $1,500,000.
| Death Benefit | 20 Year Term Monthly Rate |
| $1,500,000 | $81 per month without refund |
| $1,500,000 | $72.90 per month with refund* |
*The refund is 10% of the entire premium.
Age 40
Sample 20 year term rates for a non smoker 40 year-old man in good health and a death benefit of $750,000.
| Death Benefit | 20 Year Term Monthly Rate |
| $750,000 | $66 per month without refund |
| $750,000 | $59.40 per month with refund* |
*The refund is 10% of the entire premium.
Age 50
Sample 20 year term rates for a non smoker 50 year-old man in good health and a death benefit of $1,000,000.
| Death Benefit | 20 Year Term Monthly Rate |
| $1,000,000 | $218 per month without refund |
| $1,000,000 | $96.20 per month with refund* |
*The refund is 10% of the entire premium.
Guarantees? Don’t count on them!
Guarantees are very important. You’re counting on it and probably aren’t too happy about surprises. Well, your Trust Refund is something that shifts every year and it isn’t guaranteed. It’s important to know that a refund has been paid by the the trust since the beginning. This means that it’s likely to continue- just be aware that it is not guaranteed. You should also know that all of the premium contributions are lacking a guarantee. It’s not all bad news though. Here are some of the Trust Fund positives:
Refund Distributions
Since 1947, the Trust has provided distributions and refunds for over 70 years.
Largest Refund
In 2016, there was a refund distributed to the members that was in excess of $164,000,000.
Did you know?
We’re huge supporters of the AICPA as they’e a great organization. But, did you know that they don’t actually insure the group plans? The insurance carrier that provides the life insurance is actually Prudential.
This is actually good news because Prudential life is rated A+ by AM Best. The good news is that we feel that refunds would probably not go down significantly. So for current policy holders- rates should probably stay unaltered. Just be aware that there have been companies in the past that had an A+ rating and went through financial problems. The risk is probably small, but needs to be known.
Can you increase the Trust Refund?
There are several ways to increase the refund that you’re eligible for. Let’s look into how they work.
Insure the Spouses
If both of the spouses are insured with AICPA the refund increases by $25
EFT Payment
Pay your premiums by EFT and you'll get a $25 increase to your refund
Multiple Policies
When members get more than 1 product from AICPA trust- they'll get back $5
Child Rider
Choose the Child Dependent Life Rider and members get back $6 annually
Understanding AICPA Life Insurance Trust Refunds [Final thoughts]
When using the AICPA Trust- members get a access to a solid insurance options, products and rates that are fair. Their life insurance policies are backed by Prudential Life. The Prudential Life Insurance Company is a financially stable and strong carrier.
When you’re an AICPA member, you’re optimistic about your annual refund check. However, when you’re a CPA- you’re usually trying to find easy ways to save money. At Life Insurance Blog, we always feel that comparison shopping is one the biggest ways to save money. Each shopper is unique and so is each life insurance company. Even when you factor in your annual refund check – shopping on the individual market will usually save you money.
Always remember that rates are not guaranteed and you’re “providing a loan” to the AICPA Trust via your premium contributions. This method allows the Trust to earn interest. Are you comfortable with that arrangement?
Your refunds are also not guaranteed and needs to be factored into your decision. You need to know that your policy is a long term purchase. More than likely – the longer you have your life insurance policy- the greater the chance of a rate increase or a refund decrease.
It’s pretty clear that the Trust Refund from AICPA is a big part of the life insurance policies that they offer to their members. This post was hopefully helpful in providing information on their Trust Refund. Now you can really assess your life insurance choices to see what makes sense for you.
How should I shop for life insurance?
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