Mutual of Omaha Life Insurance Review
AM Best Rating
Term, Whole, Universal
Mutual of Omaha is one of the most well-known and highest rated insurance providers in the country today. This company has been around for a long time and offers a wide range of insurance products to cater to the financial needs of people from all walks of life.
This review takes a detailed look at Mutual of Omaha, its background, financial strength, the policies offered, and the pros and cons of buying life insurance from this company.
Our Take - Is Mutual of Omaha the Right Option for You?
Many high-risk applicants with preexisting health conditions or a family history of diseases find assurance in Mutual of Omaha's guaranteed issue policies. On the other hand, applicants in good health who do not have any major health problems may find better rates at one of many other life insurance companies.
About Mutual of Omaha
Mutual of Omaha is a Nebraska based financial services company established in 1909. The company, initially known as, the Mutual Benefit Health & Accident Association, had a presence limited to Nebraska. In the early half of the twentieth century, though, the company managed to rapidly expand its presence all over the country. By 1958, the company had paid over $1 billion in benefits to its policyholders.
Today, Mutual of Omaha is a Fortune 500 company and one of the top-rated insurers in the country. They offer a wide array of products and services including life insurance, health insurance, disability insurance, annuities, banking, and investment services.
For many Americans, particularly those who grew up in the 60s and 70s, the Mutual of Omaha is better known as the sponsor of Wild Kingdom, which was an extremely popular TV show that remained on air for more than 20 years during its run.
Mutual of Omaha has consistently received highly positive ratings from leading rating agencies over the years. Below are the brand’s current ratings.
- A.M. Best: A+ (Superior)
- Moody’s: A1 (Good)
- Standard & Poor’s: AA– (Very Strong)
- Comdex: 93 out of 100
The life insurance policies offered by Mutual of Omaha are issued by its fully owned subsidiary United of Omaha, which was established in 1926. The company offers term life insurance as well as permanent life insurance.
Term Life Insurance
Mutual of Omaha’s term life policy offers four different term lengths to choose from—10, 15, 20, and 30 years. Applicants wishing to apply for the policy should be between the ages of 18 and 80. Death benefit options starts at $100,000. The premium and the death benefit remain unchanged during the level term period. Once the policy expires, policy holders have two options:
- Renew the policy annually until reaching the age of 95. The premium slightly increases with every renewal due to age and health status.
- Convert the term plan into a permanent plan and enjoy lifelong coverage. The premium, which is determined at the start of the coverage period, remains the same until death.
Mutual of Omaha Term Life Express
Mutual of Omaha offers a term life insurance product that allows some applicants to skip the exam and breeze through underwriting as fast as in a few weeks. It is a great choice for those looking for quick term coverage. Coverage amounts range from $25,000 to $300,000 for ages 18 through 50, and $25,000 to $250,000 for ages 51 through 65.
Term life express policies include several riders at no additional cost. These riders include the accelerated death benefit, living benefits rider, residential damage rider, waiver of premium for unemployment, and common carrier death benefit provision. For an additional cost, the insured can add a disability income rider, disability waiver of premium rider, accidental death, or dependent children's coverage.
Learn more in the term life express brochure.
Permanent Life Insurance
Mutual of Omaha offers whole life as well as universal life insurance.
Whole Life Insurance
The company offers guaranteed whole life policies with a graded death benefit, which means the beneficiary is not eligible to receive the entire death benefit amount right at the start of the coverage period. This is typical for most whole life policies. This policy requires no medical exams and no questions asked regarding health condition either. Applicants are accepted regardless of their health condition. The only eligibility requirement is applicants are between the ages of 45 and 85. The death benefit ranges from $2,000 to $25,000.
Being a whole life policy, the whole life coverage also has a cash value portion, which grows in value if the policy remains active. Under the graded death benefit clause, if the policy holder dies within the first two years of the coverage period, the beneficiary will only receive the total amount of premiums paid until death plus 10% interest. The important thing to note here is the graded death benefit rule applies only for deaths due to natural causes. If the insured dies in an accident, the beneficially will be paid the entire death benefit amount, even if it happens to be the very first day of the coverage period.
From the third year of coverage, there are no such restrictions and the beneficiary will receive the full death benefit amount in the event of the policy holder’s death.
Children’s Whole Life Insurance
The company also offers a whole life policy specifically designed for children between the ages of 14 days and 17 years. The death benefit ranges from $5,000 to $50,000, and the policy includes a cash value account as well.
Universal Life Insurance
The Mutual of Omaha offers four different types of universal life policies. These are described below.
Life Protection Advantage
This type of coverage provides a guaranteed death benefit until the age of 85. The insured can extend coverage even further if there is no lapse in premiums, meaning the policy holder pays the minimum payable premium payment continuously and on a regular basis.
It is an indexed whole life policy, which means the cash value’s growth depends on the performance of an equity index. As a result, the cash value account has the potential to grow at a much faster rate compared to a fixed-interest account.
Furthermore, it comes with an accelerated death benefit rider, meaning the insured will receive a portion of the death benefit if he or she becomes chronically or terminally ill, and a guaranteed refund option rider that pays the insured the total amount of premiums paid if they no longer need coverage after a certain period of time.
This coverage option provides lifelong coverage if the policy holder maintains the premium payments. The most important feature of the policy is it offers downside protection for the cash value account. The cash value account is directly affected by the performance of an equity index, much like the Life Protection Advantage policy discussed above. The difference, however, is the account is protected against the downside of the volatile nature of the market. What this means is the cash value account rapidly grows in value when the market performs well and remains steady and unaffected when it performs poorly. True to its name, it offers tremendous income potential in the long run.
Guaranteed Universal Life
This coverage offers an affordably priced policy providing a guaranteed death benefit. Policy holders can choose the coverage period for a particular period of time or for an entire lifetime. There is a cash value account, but the policy is structured in such a way that the emphasis is more on the death benefit than the living benefit. It offers an accelerated death benefit rider as well as a guaranteed refund option rider.
This option is similar to the Guaranteed Universal Life policy discussed above, but the cash value account is set to receive at least 2 percent interest on a yearly basis. As a result, it has the potential to grow at a faster rate than the Guaranteed Universal Policy.
Accidental Death Insurance
Mutual of Omaha also offers an accidental death insurance policy which pays the beneficiary in case the insured dies in an accident. Applicants need to be between the ages of 18 and 70 in order to qualify for this type of policy. Once the term is over, the insured can renew the policy until the age of 80, and the policy offers guaranteed coverage, which means no one will be rejected due to health condition or any other reason. Furthermore, the death benefit can be as high as $1 million. There is a list of injuries (work-related as well as non-work-related) which are covered under the policy. If the insured dies as a result of an injury covered in this list, the beneficiary will receive the entire death benefit amount.
Mutual of Omaha Life Insurance for Seniors
Mutual of Omaha is a common life insurance choice for seniors. For term life insurance, Mutual of Omaha allows applicants up to 80 years of age. For permanent life insurance, Mutual of Omaha allows applicants up to 85 years of age. With their strong financial rating and competitive pricing, they are a great choice for seniors. The biggest hurdle for seniors when buying life insurance is the premium amount. Due to their older age and higher likelihood of health problems, the rates tend to be much higher. However, seniors generally have smaller requirements for life insurance and can purchase a policy with a lower coverage amount that still meets their needs. Learn more about life insurance for seniors.
Mutual of Omaha – Advantages and Disadvantages
The Mutual of Omaha offers guaranteed acceptance permanent life policies, which qualifies applicants regardless of health status. This can be incredibly beneficial for people with preexisting conditions or a family history of hereditary diseases.
There is no need to undergo any medical exam and some policies do not even require a medical questionnaire. Basically, anyone within the age requirements can get accepted, even if other companies that uphold much stricter underwriting guidelines rejected them.
The Mutual of Omaha gives the option of converting its term life plan into a permanent life plan. The benefit of having such an option is policy holders do not have to apply and qualify for a new policy once the term policy expires. They can simply convert their policy into a permanent life policy and enjoy lifelong coverage, irrespective of insurability at that stage.
Lenient Underwriting for High-Risk Individuals
This stellar insurance company has lenient underwriting guidelines for pilots, scuba divers, and other such people with certain other high-risk hobbies and occupations. Most other companies typically classify these individuals as high-risk consumers and downgrade them from preferred category to standard category.
Similarly, the company also has lenient underwriting guidelines for people suffering from sleep apnea, asthma, high blood pressure, and high cholesterol levels. People suffering from these types of conditions generally pay a higher rate for similar policies from most other insurance companies. However, the Mutual of Omaha offers competitively priced policies even if for those individuals who have any of the aforementioned conditions, as long as they maintain regular treatment.
The Mutual of Omaha has been in the industry for more than a century and is known for its financial stability. The company has nearly $40 billion in assets and has a very good track record for settling claims without any unnecessary delays or hassles. Thus, in terms of financial strength and the ability to meet long-term commitments, the Mutual of Omaha is as good as any other company in the industry today.
Limited Whole Life Death Benefit
This salient insurance company’s whole life policy has a death benefit of $25,000, which is ideal for those who are looking for a policy to cover their final expenses. It is not enough to cover any major financial commitments the insured might have.
Limited Online Options
Individuals looking to find the best options available will need to talk to an agent, as account holders may only use the online account offered to monitor an already existing policy. Policy holders must also speak to an agent to cancel their policy, change their payment schedule, or update their personal information. Individuals used to the convenience of getting things done online may find this company to be inconvenient.
Lack of Variable Universal Life Insurance
This effective insurance brand does not offer a variable universal life insurance policy. Notwithstanding the fact that variable life policies are inherently risky due to their performance contingent to the stock market, many people prefer the option to invest their premium in one or more sub-accounts of their choosing.