Mutual of Omaha Insurance Company Review
Mutual of Omaha is one of the best known of American insurance companies, largely because of its sponsorship of television series like the popular Wild Kingdom. Like most US insurers, the Nebraska based organization has branched into a number of areas including financial services, retirement planning, and banking. It is now offering retail banking in some areas and provides operational risk management through its Continuum Worldwide Corporation subsidiary.
The company was first organized in 1909 as the Mutual Benefit Health & Accident Association. At that time it only provided health and accident insurance. Omaha was added to the company's name in 1918 when it combined with the Omaha Health & Accident Association. It added disability insurance to its line of products around the same time. By 1924, the company had grown into the eighth largest insurer in the United States. It organized the United Benefit Life Insurance Company to provide life insurance, pensions, and annuities in 1926. Mutual started offering hospitalization insurance in the 1930s. The company became Mutual of Omaha in 1962.
In recent years the company has been moving out of the insurance business and into the financial field. It stopped issuing variable annuities, health insurance, and variable life insurance in 2003. It opened Mutual of Omaha Bank in 2007 and entered the rollover and retirement products market in 2008 by purchasing Retirement Marketing Services.
Mutual of Omaha Life Insurance
Although Mutual no longer offers variable life insurance it still markets term, universal, and whole life insurance products. The company also offers accidental death insurance. The accidental death insurance cannot be converted into a permanent policy. Up to $1 million in accidental death coverage is available.
Three term life insurance options are offered by the company. The Term Life Express Policy offers up to $400,000 in death benefits (a figure that seems low) but can't be converted into a permanent policy. The Term Life Complete offers more benefits and an option for conversion to a permanent policy but only in the first five years. The Term Life Answers is similar but offers the option to convert to a permanent policy at any time.
Two of the universal policies, the AccumUL Plus and the Guaranteed Universal Life Complete, offer the possibility of benefits over $1 million. These also have some cash value but no indexed portfolios are available. The Guaranteed Universal Life Express is a similar plan that's limited to a benefit of $250,000. Only the Guaranteed Life Complete offers a guaranteed death benefit. The policies are supposed to be easy to customize but details are not provided.
Guaranteed Whole Life and Children's Whole Life are also offered but neither of these policies seem like a good deal. The Guaranteed Whole Life offers only $25,000 in benefits. The only advantage to this plan is that no medical exam is required from applicants. The Children's Whole Life product is very cheap but of questionable value because it would pay a death benefit of between $5,000 and $30,000.
Mutual of Omaha Annuities
A limited number of immediate and deferred annuities are available. Unfortunately few details of these products are available. The names of the plans are available on the website but such details as the interest rate, surrender fees, and administration fees are missing.
A variety of payout methods for a product called the "Ultra Income" are mentioned but the interest rate isn't mentioned. Instead, Mutual of Omaha simply states that such basic features as a death benefit and guaranteed life income (also known as a life annuity) are available.
Even fewer details about the "Bonus Flexible Annuity" are provided. The website states a person can "access your money when you need it" but does not provide any details of how this is done. No mention is made of fees is made, although varying premiums are mentioned.
Ratings for Mutual of Omaha
The ratings for Mutual of Omaha are good despite recent moves outside its core business into potentially risky fields such as consumer banking. Ratings from three of the major financial analysis firms are available for Mutual of Omaha's main operation. Only two ratings are available for its subsidiaries, the Companion Life Insurance Company and the United World Life Insurance Company.
A.M. Best gave Mutual of Omaha an A+ for financial strength, which means Best's analysts think it can meet obligations to policyholders. Best gave the subsidiaries the same rating so they appear to be exposed to the same risks. Standard & Poor's (S&P) rated both operations as very strong, or AA-, This is the fourth highest rating given by the S&P, which means there is room for improvement. Moody's gave the main company a rating of Aa3, indicating that Mass Mutual can withstand financial stress. No ratings from the fourth ratings company, Fitch's, are available.
Mutual of Omaha does not seem like a good resource for investors. Its offering of products is limited and details about these are not available. The failure to provide basic online details about annuity contracts shows a lack of transparency. The insurance offerings seem to offer lower benefits than comparable products from other companies.