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Mutual of Omaha Annuity Review

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This review was produced by SmartAsset based on publicly available information. The named firm and its financial professionals have not reviewed, approved, or endorsed this review and are not responsible for its accuracy. Review content is produced by SmartAsset independently of any business relationships that might exist between SmartAsset and the named firm and its financial professionals, and firms and financial professionals having business relationships with SmartAsset receive no special treatment or consideration in SmartAsset’s reviews. This page contains links to SmartAsset’s financial advisor matching tool, which may or may not match you with the firm mentioned in this review or its financial professionals.

Mutual of Omaha was founded in 1909 as the Mutual Benefit Health & Accident Association. The company got its start issuing health and accident insurance to workers in Nebraska. Since then, it has grown significantly, providing insurance coverage and other financial services to men and women across the United States. The company offers a range of fixed and immediate annuities to people in most U.S. states.

If you’re new to the world of annuities, you may have an easier time navigating things with the help of a financial advisor. SmartAsset’s advisor matching tool can pair you with up to three financial advisors in your area.

Annuity Fees Annuity Type Minimum Initial Premium More Information
Ultra-Premier Annuity Find an Advisor

Read Review

  • No annual fees
Fixed Annuity $25,000

Annuity Type

Fixed Annuity

Minimum Initial Premium

$25,000
Income Access Annuity Find an Advisor

Read Review

  • No annual fees
Immediate annuity $10,000

Annuity Type

Immediate annuity

Minimum Initial Premium

$10,000
Bonus Flexible Annuity Find an Advisor

Read Review

  • No annual fees
Fixed annuity $5,000

Annuity Type

Fixed annuity

Minimum Initial Premium

$5,000

As of January 2020, United of Omaha Life Insurance Company (the subsidiary of Mutual of Omaha that underwrites annuities) has secured the following financial strength ratings from some of the major rating firms in the industry:

  • A.M. Best: A+ (second-highest out of 13)
  • Moody’s: A1 (fifth-highest out of 21)
  • Standard & Poor’s (S&P): AA- (fourth-highest out of 20)

Ultra-Premier Annuity

The Ultra-Premier Annuity from Mutual of Omaha is a fixed deferred annuity that allows annuitants to grow their funds over a fixed period of years without worrying about income taxes until retirement. As the annuitant, you can choose either a five-year or seven-year guarantee period, during which your investment will stay protected and accrue interest at a rate specified in your contract.

The Ultra-Premier annuity also has a built-in death benefit. If you pass away during your guarantee period, your chosen beneficiary immediately receives the value of your annuity as a lump sum.

The maximum issue age for this annuity is 89 years old. You’ll also need to invest at least $25,000 when you open your account.

Fees

There are no annual maintenance fees to worry about with this annuity. The only fee you may encounter is a withdrawal charge, which you’ll face if you withdraw more than 10% of your contract’s value over the course of a single year. The exact charge will be determined by the year of your contract. See the following table; the penalties will apply to the amount you withdraw in excess of 10%.

Withdrawal Fee Schedule
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8+
9% 9% 8% 7% 6% 5% 4% 0%

Annuitants that withdraw from their contract prior to turning 59.5 years old will be on the hook for a 10% income surtax from the IRS.

Reasonable Return Expectations

As of Feb. 2021, the Ultra-Premier Annuity has a 2.25% fixed interest rate for the seven-year guarantee period and a 2% rate for five-year periods. These rates will change over time.

Income Access Annuity

The Income Access Annuity is an immediate annuity available in every state except Washington. With this product, you can begin receiving payouts as soon as a month after you make your initial investment. Payments are guaranteed for your entire life, even if you outlive your initial investment. You must be younger than 85 years old and have at least $10,000 in investable assets to open this account.

You can choose to have your benefit payments come on a monthly, quarterly, semi-annual or annual basis. Your payouts must begin between 30 days and 13 months after you purchase the annuity.

The Income Access Annuity has some features that come standard, while others are optional. One standard feature is a return of premium death benefit, meaning if you pass away before you’ve received your whole premium back, a beneficiary of your choice will receive the balance. This remainder is doubled if you die in a “common carrier” (a plane, train, taxi, bus, etc.).

If you elect for it, you can guarantee a minimum death benefit of 10% of your initial premium. If you go this route, your beneficiary will receive the greater of your contract value and 10% or the remaining premium. You can also opt for the Survivor Continuation Option, which will extend benefits until both you and your spouse pass away.

Additionally, you can elect for other optional riders that increase your payment amount while you’re still alive. You can choose an inflation protection rider that increases your payments by 3% every year. Also, if you meet certain health condition requirements, you can opt for a 10% to 20% income increase.

Fees

As is the case with most immediate contracts, the Income Access Annuity has no annual maintenance fees. Again, remember that you’ll face a 10% penalty from the IRS if you make a withdrawal before age 59.5.

Reasonable Return Expectations

Returns for immediate annuities are typically slim, as they’re designed to provide reliable income rather than growth. The Income Access annuity is similar, though if you outlive your premium, you’ll make some extra money. Additionally, if you opt for the inflation protection rider, you can expect a higher return annually.

Bonus Flexible Annuity

The Bonus Flexible Annuity is a deferred fixed annuity with a set interest rate and flexible options for investing. To set things up, you can invest an initial premium of at least $5,000 or you can make annual contributions of at least $1,200. You’re also able to make additional contributions during the first year of your contract’s life, and these contributions will earn an additional 1% interest for the first year. Also, any contributions above $50,000 will receive a 0.15% bonus.

The maximum issue age for this annuity is 89 years old.

Fees

There are no annual maintenance fees attached to the Bonus Flexible Annuity. However, you will have to pay a fee if you withdraw more than 10% of your accumulation value within a single year. Anything over that cap will have the fee schedule below applied to it:

Withdrawal Fee Schedule
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9+
8% 8% 7% 6% 5% 4% 3% 2% 0%

Like any tax-deferred account, withdrawals you make before age 59.5 will be accompanied by a 10% income tax penalty, courtesy of the IRS.

Reasonable Return Expectations

Like any fixed annuity, the returns you receive are entirely dependent on the fixed rate you're given by the annuity company. While Mutual of Omaha currently doesn't release rates for this annuity, you can check with a representative to learn more.

Retirement Planning Tips

  • Planning your retirement benefits and income on your own is a daunting venture. Luckily, finding a financial advisor that can help doesn’t have to be hard. SmartAsset’s free tool matches you with financial advisors in your area in 5 minutes. Get started now.
  • There are many factors to account for when formulating your retirement plans, and you should be sure to account for Social Security benefits. If you’re unsure of what you’re in line to receive from Uncle Sam, check out our Social Security calculator.

Best Places for Small Business Owners

SmartAsset analyzed data to find the best places for small business owners in the country. This interactive map shows the best counties for small business owners in the U.S. and in each state. Zoom between states and the national map to see the top spots in each region. Also, scroll over any county to learn about that region's small business statistics.

Least
Most
Rank County Small Business Returns Small Business Income Income Taxes

Methodology Which places are best for small businesses owners? To answer this question, we considered three factors: the proportion of people in a county with small business income, how much business income those people reported and the amount of tax a potential resident must pay on their income.

To determine how attractive a region is for small business owners, we compared the number of tax returns that report small business income compared to the total tax-filing population of the region. Next, we compared the total amount of small business income to the overall amount of income reported in each region.

Small businesses are typically incorporated as pass-through entities, meaning that the business owners pay income taxes on the company profits rather than the company itself paying income tax. Because of this, income taxes can play a major role in determining the financial success of a given small business. To determine income tax burdens across counties, we used the national median household income. We then applied relevant deductions and exemptions before calculating federal, state and local income taxes for each location.

These three factors were then indexed and equally weighted to yield our small business index. Places with the highest small business index are the places which ranked the highest in the study.

Sources: Internal Revenue Service (IRS), US Census Bureau 2018 American Community Survey, Government Sources, SmartAsset