Although it does not currently make our list of the top 10 whole life insurance companies, Mutual of Omaha ranks among the best insurance companies in the U.S. for various product niches.
In the following Mutual of Omaha life insurance review we will focus on the company’s history, strong ratings, life insurance policies, and the unique features offered.
Review of Mutual of Omaha Life Insurance Company
When seeking out the best life insurance policies it helps to familiarize yourself with the different companies in the marketplace. There is no “best” company, rather, the best life insurance companies for you must be tailor made to meet your needs, goals, and objectives.
About Mutual of Omaha
Headquartered in Omaha, Nebraska, Mutual of Omaha (MOO) has been around since 1909.
Typically, being a mutual life insurance company would mean that Mutual of Omaha is owned by participating policyholders, who share in the ownership rights of the company, as well as take part in the company’s profits through dividends. However, MOO does not offer participating life insurance. This is somewhat strange for a mutual company, since the majority of top mutual insurers offer participating whole life.
Mutual of Omaha is available in 50 states and the District of Colombia. MOO’s Life insurance is underwritten by United of Omaha Life Insurance Company. United of Omaha is not licensed in New York. In New York, life insurance is underwritten by Companion Life Insurance Company.
Mutual of Omaha Ratings
Mutual of Omaha and United of Omaha Life Insurance Company have top ratings from all the major ratings agencies.
As of April 2018:
- A.M. Best rating: A+
- S&P rating: AA-
- Moody’s rating: A1
- Fitch rating: N/A
- Comdex Ranking: 93 out of 100
Mutual of Omaha’s Products and Services
Mutual of Omaha is a multi-line insurance company that offers the following products and services through its various subsidiaries.
- Medicare Supplement Insurance
- Disability Income Insurance
- Long-Term Care Insurance
- Life Insurance
- Critical Illness
- Dental Insurance
- Cancer, Heart Attack and Stroke Insurance
Types of Life Insurance Policies Offered
Mutual of Omaha’s life insurance is underwritten by United of Omaha Life Insurance Company in all sates but New York. In New York, Mutual of Omaha life insurance is underwritten by Companion Life Insurance Company.
Mutual of Omaha offers two types of life insurance: permanent and term.
Benefits of Term Life Insurance
- Lower Initial Cost
- Income Protection
- Mortgage Protection
- Conversion Option
Benefits of Permanent Life Insurance
- Business Succession Planning
- Buy Sell Agreements
- Key Man Insurance
- Estate Planning
- Infinite Banking
- Executive Bonus Plans
- Deferred Compensation Plans
- Retirement Planning
- Wealth Building
Mutual of Omaha Life Insurance Policies [Plans and Features]
Mutual of Omaha offers two primary life insurance types: term and permanent.
Term Life Insurance
Mutual of Omaha offers convertible term life insurance which allows you to have a large guaranteed death benefit for a lower initial cost than permanent coverage. Term life offered through United of Omaha is convertible which allows the owner to convert the policy to permanent life prior to the end of the term.
Why consider convertible term life insurance?
Some of the primary reasons to consider convertible term life are the low initial costs and the ability to convert to permanent life insurance with no evidence of insurability required.
Mutual of Omaha Permanent Life Insurance
Mutual of Omaha offers both whole life and universal life insurance. Each type of permanent life insurance product has its own unique benefits. We will highlight the benefits of each.
Whole Life Insurance
There are many whole life insurance pros and cons. Here are just a few.
Whole life insurance provides permanent death benefit protection, so no matter when you die your family will receive a death benefit payout.
Whole life builds cash value, which can be used for anything, including to supplement income in retirement, pay off debt, purchase a home, pay for college, etc.
Whole life provides fixed premium payments so you don’t have to worry about your premium increasing as you age.
The drawback to whole life would be that whole life insurance rates tend to be higher than other forms of permanent coverage, particularly when you are dealing with a Whole Life Guaranteed policy, such as the one offered by MOO.
Mutual of Omaha’s Living Promise whole life insurance is available as a level benefit plan and graded benefit plan. The policy must be qualified for. There are different age requirements depending on the life insurance plan you choose. The graded benefit plan is not available in all states. The face amounts available also vary on the plan you choose, with the Living Promise level benefit plan ranging from $2,000 to $40,000 total whole life coverage amounts.
Whole Life Guaranteed Policy
Mutual of Omaha offers guaranteed coverage whole life insurance online. The Whole Life Guaranteed policy available from the company’s website has a graded death benefit for the first two years of the policy. You must be between the ages of 45-85 (50-75 in NY) in order to qualify. Death benefits range from $2,000 to $25,000.
Universal Life Insurance
Universal life insurance is similar to whole life in that it lasts your entire life if designed properly. However, there are subtle differences between whole life vs universal life that you need to be aware of.
Mutual of Omaha has four different universal life policies to choose from, including guaranteed universal life, indexed universal life and variable universal life.
Universal life offers flexible premiums, allowing you to make more or less premium payments. You can also choose different death benefit options, including a fixed death benefit or increasing death benefit. And you can go back and forth between the two at your discretion.
MOO offers 4 different universal life policies:
- Life Protection Advantage
- Income Advantage Indexed Universal Life
- Guaranteed Universal Life
Income Advantage Indexed Universal Life
MOO’s IUL insurance offers the flexible benefits of universal life with indexed accounts linked to the returns of specific equity indexes. Income Advantage is focused on cash value accumulation, rather than death benefit.
Issue ages range from 0 to 85. The minimum face amount available is $100,000.
A fixed account with a guarantee 2% return is available. All account also include a guaranteed 0% floor.
As of March 2016, the policy has three different crediting strategies you can choose from, including:
- 100% participation rate with 11.5% cap rate;
- 140% participation rate with 8.5% cap rate; or
- 65% participation rate with uncapped rate potential.
Additional Benefits of Permanent Life Insurance
There are many additional advantages of life insurance, including the following.
Tax free life insurance policy loans
Using your cash value as collateral, you can take out a life insurance loan to be used for whatever you need. Many people use this money to help supplement their income in retirement.
Tax deferred cash value growth
The Internal Revenue Code has a special section for cash value life insurance tax benefits. Under IRC 7702, cash value life insurance grows tax deferred. By borrowing against your cash value, rather than outright withdrawing your cash value, you can avoid ever paying taxes on your cash value growth.
Tax free death benefit
The life insurance death benefit is not taxed to your beneficiary as income. The death benefit is taxed is if your estate exceeds the federal estate tax exemption limit or if your estate exceeds your state’s inheritance tax. Therefore, if your estate is large, proactive asset protection planning is necessary.
Mutual of Omaha Life Insurance Riders
The following riders are not available on all of MOO’s life insurance products.
Guaranteed Refund Option: provides a 60 day window upon the 15th policy anniversary when the owner can surrender the policy and receive 50% premiums back in return, with the potential for 100% at year 20, 21, 22, 23, 24 and 25.
Accelerated Death Benefit for Chronic Illness: can access a portion of the death benefit for a qualifying chronic illness.
Accelerated Death Benefit for Terminal Illness: can access a portion of the death benefit for a qualifying terminal illness, if diagnosed with a life expectancy of 12 months or less.
Lapse Guard Rider: helps prevent a policy from lapsing when disbursements are being taken for an extended period of time in retirement.
Disability Waiver of Premium Rider: the waiver of premium rider waives the monthly premium due. There are two separate types of waiver riders available: the Disability Waiver of Policy Charges Rider and the Disability Continuation of Planned Premiums Rider.
Guaranteed Insurability Rider: allows the purchase of additional life insurance without needing to prove insurability. This is a great rider to add to life insurance for children.
Mutual of Omaha Life Insurance Conclusion
Mutual of Omaha provides some excellent life insurance options. The company is a solid choice when considering permanent life insurance from a mutual company.
Interested to see how your Mutual of Omaha Life Insurance illustration stacks up to the competition? Give us a call today for a free life insurance consultation with an advanced markets professional.