Mutual of Omaha Annuity Review

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 88 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%.

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 Aug. 2022, the Ultra-Premier Annuity has a 4.10% fixed interest rate for the seven-year guarantee period and a 4.15% rate for five-year periods. These rates will change over time according to the rate environment.

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.

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:

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.