Mutual of Omaha IUL: Income Advantage, Life Protection Advantage and What to Check

Short answer: For a Mutual of Omaha IUL, Mutual of Omaha’s universal life page lists two indexed universal life policies, Life Protection Advantage and Income Advantage. Its IUL page calls Life Protection Advantage “protection focused” and says Income Advantage “focuses on accumulation.” FINRA describes indexed universal life insurance as “generally not considered a security.” Mutual of Omaha’s universal life insurance is “Underwritten by United of Omaha Life Insurance Company.”

If you’re new to these policies, start with what IUL insurance is and how it works.

What IUL policies does Mutual of Omaha offer?

Mutual of Omaha’s universal life page lists “Life Protection Advantage” and “Income Advantage,” each labeled indexed universal life. Its disclosures also name “Indexed Universal Life Express.” Mutual of Omaha’s IUL page describes all three:

• Life Protection Advantage IUL: “This IUL is protection focused.” Mutual of Omaha describes it as designed for long-term death benefit protection “such as income replacement, wealth transfer or estate planning.”
• Income Advantage IUL: Mutual of Omaha says this IUL “focuses on accumulation,” that “It works to offer death benefit protection, while building a tax-deferred cash value,” and that it “Emphasizes cash growth potential more than Life Protection Advantage.”
• Indexed Universal Life Express: Mutual of Omaha says IUL Express uses “simplified underwriting.”

How do Mutual of Omaha’s IUL policies compare side by side?

Sources: Mutual of Omaha’s universal life page and IUL page. Mutual of Omaha says, “Product base plans, provisions, features and riders may not be available in all states and may vary by state.”

How does a Mutual of Omaha IUL credit interest?

Mutual of Omaha describes two places cash value can go:

1. Index crediting strategies. “A portion of your cash value may be credited interest based on index crediting strategies.” Another Mutual of Omaha article says the cash value “can grow based on a market performance index, usually a broad index such as the S&P 500 or the Dow Jones Industrial Average.” Ask which indexes your policy would offer.
2. A fixed account. “A fixed account offers the policy owner a fixed rate of interest as declared by the company.” Ask whether the fixed account has a guaranteed minimum rate.

Mutual of Omaha says “The interest credited may be limited by caps and participation rates, depending on the index crediting method selected.” It also describes downside protection for when the index change is negative. Ask the agent to show you the current crediting terms in writing, and which ones the company can change.

FINRA says indexed universal life “falls under the universal life insurance umbrella,” and it describes indexed universal life insurance as “generally not considered a security.”

What riders do Mutual of Omaha IUL policies have?

For Life Protection Advantage, Mutual of Omaha’s universal life page mentions “included accelerated death benefit and guaranteed refund option riders.” Its IUL page says “For Life Protection Advantage, the GRO rider is not available for clients age 60 or above.” Mutual of Omaha describes the accelerated death benefit as “Early access to a portion of your death benefit in the event of a terminal or chronic illness.”

Mutual of Omaha’s IUL page says an “LTC Rider” is “available on the Income Advantage IUL & Life Protection Advantage IUL.” It also says “The LTC rider is not approved in California” and “If the policy is issued with the LTC rider, the Chronic Illness Rider will not be included.” Confirm with the agent which riders are available on the policy you’d buy in your state, which cost extra and what conditions apply.

How do loans and withdrawals work?

Mutual of Omaha says the amount that may be available through loans or withdrawals is “as defined in the contract.” Ask how loan interest is charged and how a loan would affect index crediting.

Mutual of Omaha says “Any policy withdrawals, loans and loan interest will reduce policy values and may reduce benefits.” Mutual of Omaha’s pages describe potential tax advantages for loans and withdrawals with conditions, including that “the policy does not become a modified endowment contract,” and it says “Mutual of Omaha does not provide tax or legal advice.” Talk with a tax professional before counting on any tax treatment.

For universal life, TDI says “If the cash value reaches zero, your policy could lapse.” New York DFS says “If you surrender a universal life policy you may receive less than the cash value account because of surrender charges.” For more, see IUL cash value and policy loans and IUL fees and costs.

How long can coverage be guaranteed?

For Life Protection Advantage, Mutual of Omaha says the death benefit “can be guaranteed through age 90” “and, perhaps longer—as long as you pay the no-lapse premium or greater.” It adds, “For clients over age 75, the no-lapse protection premium provides a 10-year guarantee.”

Mutual of Omaha says “All guarantees subject to the financial strength and claims-paying ability of the issuing company.” TDI says that for a no-lapse guarantee, “You must pay your premiums on time for the guarantee to apply.”

Who underwrites Mutual of Omaha IUL, and what about New York?

Mutual of Omaha says: “Universal Life Insurance Underwritten by United of Omaha Life Insurance Company.” It adds, “United of Omaha is licensed nationwide except in New York and does not solicit business in New York,” and “In New York, Companion Life Insurance Company, Melville, NY 11747 underwrites life insurance and annuities.”

What should you check in a Mutual of Omaha IUL illustration?

The NAIC says an illustration “is a presentation or depiction provided to prospective or new policy owners,” and that guaranteed elements include “policy benefits, premiums, values, credits, and charges,” with “a non-guaranteed counterpart in the basic illustration.” Use this checklist:

1. Guaranteed vs. non-guaranteed columns. Ask the NAIC’s question: “What part of the premium or policy value isn’t guaranteed?”
2. The worst case. The NAIC says, “Ask what might be the highest premium you’d have to pay to keep your coverage.”
3. Loans. Ask to see how a loan would change policy values and the death benefit.
4. Issue ages and face amount. Ask the agent the issue ages and minimum face amount for each product in your state.
5. Surrender charges. Mutual of Omaha says that if the face amount is reduced during the surrender charge period, “a surrender charge may be applied.” Ask how long that period lasts.
6. The application. The NAIC says, “It’s important to tell the truth on the application.” TDI says, “Life insurance policies have a two-year contestable period.”
7. The free look. The NAIC says you can return a new policy for a “full refund within a certain period, usually 10 days after you receive it,” and TDI says “Texas policies have a free-look period of at least 10 to 20 days.”
8. A comparison. TDI says, “Don’t choose a policy on price alone.” The NAIC says, “Don’t cancel your current policy until you get the new one.”

The bottom line

Mutual of Omaha’s pages describe Life Protection Advantage, Income Advantage and IUL Express, underwritten by United of Omaha Life Insurance Company. Check the guaranteed values in the illustration, how loans would affect the policy and which riders you’d get in your state.

A licensed agent can go over options with you. The licensed agents who work with us offer IUL policies: call (888) 603-7464 to compare options and get a quote, with no obligation. Here’s how calling RestAssured works.

RestAssured is not an insurance company or an insurance agency; we connect callers with independently licensed insurance agents. RestAssured is not affiliated with or endorsed by Mutual of Omaha. The licensed agents who work with us are appointed to offer Mutual of Omaha policies and may earn a commission if you buy one. To buy directly from Mutual of Omaha, contact Mutual of Omaha. Product names are trademarks of their owners. RestAssured doesn’t give tax or investment advice.

Frequently asked questions

Does Mutual of Omaha offer IUL?

Yes. Mutual of Omaha’s universal life page lists Life Protection Advantage and Income Advantage as indexed universal life policies, and its disclosures also name Indexed Universal Life Express. It says the coverage is underwritten by United of Omaha Life Insurance Company.

What is the difference between Mutual of Omaha Income Advantage and Life Protection Advantage?

Mutual of Omaha calls Life Protection Advantage “protection focused” and says Income Advantage “focuses on accumulation” and “Emphasizes cash growth potential more than Life Protection Advantage.” Ask the agent to illustrate both for your age and goal.

What riders come with a Mutual of Omaha IUL?

Mutual of Omaha says Life Protection Advantage has “included accelerated death benefit and guaranteed refund option riders,” though its IUL page says “For Life Protection Advantage, the GRO rider is not available for clients age 60 or above.” The IUL page also says an LTC rider is available on Income Advantage and Life Protection Advantage, though “The LTC rider is not approved in California.” Ask which riders are available in your state and what they cost.

Can you borrow from a Mutual of Omaha IUL?

Mutual of Omaha says the amount available through loans or withdrawals is “as defined in the contract,” and that “Any policy withdrawals, loans and loan interest will reduce policy values and may reduce benefits.” Ask how a loan would affect your policy and talk with a tax professional about taxes.

Is a Mutual of Omaha IUL a security?

FINRA describes indexed universal life insurance as “generally not considered a security.” FINRA says indexed universal life “follows a set stock index (such as the S&P 500) rather than allowing policyholders to choose their investments.”

Sources

• Mutual of Omaha: Universal Life Insurance
• Mutual of Omaha: Indexed Universal Life (IUL)
• Mutual of Omaha: Indexed universal life insurance can help meet your goals
• Mutual of Omaha: Riding out market fluctuations: how does indexed universal life insurance hold up?
• FINRA: Insurance
• NAIC: Life insurance illustrations
• NAIC: A Consumer's Guide to Life Insurance
• New York DFS: Types of Life Insurance Policies
• Texas Department of Insurance: Life insurance guide

This article is for general education. Policy features, prices and eligibility vary by insurance company and state; your agent will explain the specific terms of any policy before you apply.