Unraveling Mutual of Omaha Burial Insurance Plans

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Mutual of Omaha has operated out of Omaha, Nebraska since 1909 and offers many types of insurance coverage. A lot of older folks know them from their former sponsorship of the television program, “Mutual of Omaha’s Wild Kingdom. Mutual of Omaha has operated out of Omaha, Nebraska since 1909 and offers many types of insurance coverage. A lot of older folks know them from their former sponsorship of the television program, “Mutual of Omaha’s Wild Kingdom.” Their financial ratings are strong:

  • AH Best          A+                  
  • Moody’s         A1
  • S&P                 AA-
  • BBB                A+

They’ve outlasted the Great Depression and several wars. This shows their outstanding ability of paying claims when due. Your only concern is whether or not their plans are right for you.

Here, we’ll concentrate on Mutual of Omaha’s burial insurance offerings, sometimes known as “funeral” or “final expense” insurance.

These life insurance plans are aimed at seniors who wish to pay for their own final expenses but may not have the lump sum needed to buy outright. For the cost of premiums, these costs will be covered upon their death leaving loved ones financially unburdened.

If you’re a senior shopping for life insurance from Mutual of Omaha, you’ll find only guaranteed issue life online or from any advertising. They DO offer other whole life policies, but through licensed insurance brokers.Conversely, brokers do not deal with the Guaranteed Issue product.

Mutual of Omaha names their policies differently from most which can be confusing. We’ll unravel it all here.

Mutual of Omaha offers three different burial insurance policies. All are whole life. These policies show the issuer as “United of Omaha.” We will use the former name here, as that is the parent company.  Below are what we will cover in this article

Mutual of Omaha Life Insurance Plans Reviewed

“Living Promise” is the name Mutual of Omaha gives its two qualifying whole life products. One is called “Level Benefit” and the other “Graded Benefit.” The former is whole life available from day one, while the latter has a two-year waiting period.

You can apply for either of Mutual of Omaha’s Living Promise policiesby finding an insurance broker who sells it. It cannot be purchased from Mutual of Omaha directly, either online or over the phone.

How to Qualify for a Mutual of Omaha Living Promise Plan

When you find a broker, who can sell Mutual of Omaha plans, he will gather the information used to assess your eligibility for either of the Living Promise whole life plans.

The Level Benefit has more stringent requirements since its coverage is immediate, while the Graded Benefit plan has a two-year waiting period. No medical exam is required for either plan, and eligibility is based on three things:

  1. Your answers to medical questions
  2. An analysis of prescriptions taken
  3. MIB file

If you don’t qualify for a Level Benefit Plan, these same three things will determine if you’re eligible for a Graded Benefit plan. You may not qualify for either one and be offered a Guaranteed Issue policy. More about that one later.

The medical questions are a big part of determining your eligibility. You must answer two sets of questions. If you can answer “no” to all the questions in both parts, you will probably qualify for Level Benefit Coverage.

If you answer “no” to all part 1 questions but “yes” to one or more part 2 questions, you may be eligible for a Graded Benefits plan or none at all.

Note that if you answer “yes” to any part 1 question, you will not qualify for either Living Promise whole life policy.

Here is a summary of questions you’ll need to answer:

Part 1:

  • Are you currently in a nursing home, have home health care or are confined to bed?
  • Do you currently require assistance with normal daily activities, like dressing, eating, going to the bathroom?
  • Do you currently need a wheelchair, scooter or oxygen?
  • Have you ever had, been diagnosed or been treated for:
    • AIDS, HIV, or AIDS-related complex?
    • cancer, heart failure, Alzheimer’s, dementia, sickle cell anemia, Down’s syndrome, myelodysplastic syndrome, or Huntington’s disease?
    • diabetic coma, diabetes-related amputation, insulin shock or dialysis?
    • been advised to have an organ, tissue or bone marrow transplant?
    • a condition from which you were expected to die within 12 months?
  • In the past 12 months, have you:
    •  have any tests or procedures been recommended or performed which are incomplete or whose results are yet unknown?
    • had heart surgery or diagnosed with heart disease?
  • In the past 2 years have you been diagnosed with or recommended to seek treatment for any cancer?

Part 2:

  • Have you ever been diagnosed with or treated for:
    • COPD or other lung issues?
    • diabetes younger than 50 years old?
    • hepatitis C?
    • complications from diabetes?
  • In the past 4 years, have you ever been diagnosed with or treated for:
    • cancer, other than squamous cell or basal?
    • bipolar disorder, schizophrenia, MS or Parkinson’s?
    • kidney disease, systemic lupus or scleroderma?
  • In the past year, have you ever been diagnosed with or treated for:
    • coronary artery disease?
    • heart attack or bypass surgery?
    • angioplasty?
    • stroke or mini strokes?
    • surgical repair of heart valve?
    • had an unexplained weight loss of 10 pounds or more
    • had a persistent cough, fatigue or gastrointestinal bleeding for which you sought medical attention?
  • In the past year, have you been:
    • convicted or are awaiting trial for a felony?
    • convicted of a DUI or had other drug or alcohol abuse issues?
    • convicted of driving recklessly?
    • hospitalized for a mental or nervous disorder?

Mutual of Omaha “Living Promise” – Level Benefit

Mutual of Omaha’s Level Benefit plan is east-to-understand whole life. Whole life policies all have the following features:

  1. Guaranteed level premiums – your rates never go up through the life of the policy
  2. Never expires as long as premiums are paid
  3. Coverage amount never goes down

The best part of whole life is that it never expires like term life policies do. It doesn’t matter how old you get or how sick you become; this policy backs you forever.

Upon your death, your beneficiaries get a tax-free cashier’s check for the coverage amount, even if you die the same day you paid your first premium. They can use this to pay for your burial, cremation, funeral, unpaid debts, or anything else.

Besides these three whole life benefits common to all, here are the features of a Mutual of Omaha Living Promise Level Benefits policy:

  • Available in 49 states (not New York)
  • Application ages 45-85
  • Coverage amounts $2,000 – $40,000 (minimum $5,000 in Washington)
  • Coverage starts day 1

Mutual of Omaha Living Promise Level Benefit – Recommended!

As you can see by the section on eligibility requirements, it’s not easy to qualify for this plan. If you do, take it! This is a good plan with some of the lowest rates in the nation. Plus, their upper coverage limit of $40,000 is higher than similar plans in the industry.

Mutual of Omaha Living Promise – Graded Benefit

Like the Level Benefit plan described above, the Graded Benefit plan is whole life. This one does not pay out on Day 1, though. Instead, you must wait 2 years for coverage to begin. The first two years that the policy is in effect, the full coverage amount is NOT paid out upon the insured’s death. Instead, beneficiaries receive 120% return of premiums. This is true if death occurred due to natural causes. If caused by an accident, the full coverage amount will be paid.

Since this is whole life, it has the same three major features of all whole life policies – premiums don’t go up, the policy never expires, and coverage doesn’t go down.

Here are the features of a Mutual of Omaha Living Promise Graded Benefits:

  • Available in all states except Arkansas, North Carolina, Montana and New York
  • Application ages 45-80
  • Coverage amounts $2,000 to $20,000 (minimum $5,000 in Washington)
  • Two-year waiting period for full coverage

The two-year waiting period is the biggest difference, so let’s look at an example of what happens when death occurs during the waiting period. Suppose you’re a 60-year-old man with $25,000 of

Guaranteed Issue coverage. Your premiums are $100 per month (amount made up for easy calculation). You die from a heart attack one year after the policy was issued.

You have paid premiums for 12 months, a total of $1,200 paid in. Mutual of Omaha adds another 20% and pays your beneficiaries $1,440 instead of the $25,000 face amount of the policy.

This is a big difference, and you can see where your loved ones may end up with unexpected financial obligations for your final expenses.

Mutual of Omaha Living Promise Graded Benefit – NOT Recommended!

You can find better-priced and better-featured policies.

Mutual of Omaha Living Promise – Available Riders

Two riders come bundled with every Living Promise policy at no extra cost:

First, if you have been diagnosed with a terminal illness and given less than 12 months to live while insured, you can receive up to 50% of the coverage amount while still alive. Your beneficiaries will get the rest upon your death.

Second, you can similarly receive up to 50% of your coverage if confined to a nursing home for at least 90 days,or are expected to stay there indefinitely.

If you hold the Graded Benefit plan, a third rider is available at extra cost. When purchased, the beneficiaries would get double the coverage amount if you died in an accident. This is not available to holders of the Graded Benefit plan after purchase.

Mutual of Omaha Guaranteed Issue

The Guaranteed Issue plan is what Mutual of Omaha sells “direct to consumer.” This means it’s never sold through independent insurance brokers. If you’ve received direct mail offers or seen advertising on television, this is what they are selling.

Mutual of Omaha Guaranteed Issue plans are among the lowest priced in the country. These policies are more expensive than other whole life policies, because you need not qualify. You’ll answer no medical questions, take no medical exam, have no analysis of your prescriptions, and they perform no MIB file research. You may still be declined because:

  1. you don’t live in a state where it’s not issued
  2. you don’t have the legal capacity to sign a contract

Otherwise, everyone who applies is automatically accepted.

This is a whole life policy, so it, too, has the three major features of all whole life policies – premiums don’t go up, the policy never expires, and coverage doesn’t go down. Here are the other features of the Mutual of Omaha Guaranteed Issue plan:

  • Available in all states except Connecticut and Montana
  • Application ages 45-85 (50-75 New York)
  • Coverage amounts $2,000 to $25,000 (minimum $5,000 in Washington)
  • Sold directly from Mutual of Omaha’s website, not through insurance brokers
  • Two-year waiting period for full coverage
  • No medical exam or health questions
  • Spousal coverage, if within above application age range
  • Most claims paid within 24 hours
  • Funeral planning aid

Like the Living Promise Graded Benefit plans, if death occurs within the 2-year waiting period, beneficiaries receive a 120% return of premiums instead of the coverage amount. The exception is accidental death. In this case, the full coverage amount is paid out, even in the first two years.

Mutual of Omaha Guaranteed Issue – Recommended (in certain situations)

If you cannot be accepted for the Level Benefit plan or any competitors’ whole life plans, this one is a pretty good choice. Their prices are hard to beat, starting at $8.80 per month and never rising.

If you have any of the following conditions that are often declined for Day 1 policies, this policy may be right for you:

  • residing in a nursing home
  • COPD
  • controlled diabetes
  • transplants
  • any illness leaving you confined to a wheelchair
  • HIV/AIDS
  • cancer that is not squamous cell or basal

But if you are in decent health and can get accepted for an immediate pay whole life policy, you should. The two-year waiting period on this one is a big risk. No one knows when their last day will be!

If you should pass away during the waiting period, your loved ones will end up paying most of your final expenses themselves, because you are not covered. This is unnecessary. An independent broker can find instant coverage at a competitive price that covers both accidental and natural death.

A Word About Term Insurance

Mutual of Omaha does not have a term insurance policy among its offered burial plans. I mention it here as a caution. Those shopping for final expenses life insurance are often presented with term insurance plans from other companies. These can seem like great options, because their premiums are noticeably lower than whole life premiums.

It’s like comparing apples to oranges. Term life terminates. It is not permanent. When it ends, you are uninsured, and your bank account is emptier by the premiums you paid. It’s not a recommended insurance for almost anyone, yet plenty of seniors are pulled in by the low rates.

Always know what burial insurance you are looking at – term or whole. Understanding the differences will help you make the right insurance decision for you and your family.

It’s Overwhelming; How Do I Choose?

As described above, the Living Promise Graded Benefits plan isn’t recommended for anyone, and the Guaranteed Issue is only recommended when other Day 1 policies are unavailable because of health reasons.

Take the first step by studying the medical questions above. If you think you may not qualify for the Level Benefits plan, take the second step and talk to an independent insurance broker. He is experienced in determining eligibility and can help you be sure. If he determines you aren’t eligible for that plan, he can find options with other companies in your price range. He isn’t tied to the Mutual of Omaha plans.

Mutual of Omaha’s medical questions are pretty stringent when compared with others in the industry. Here are some common examples where an application to Mutual of Omaha will result in a decline for their Level Benefit plan but may be accepted by other Day 1 plans:

  • If you were diagnosed with diabetes before you reached age 50, Mutual of Omaha will decline you.Other companies will insure diabetics no matter when in life the diagnosis occurred. 
  • COPD and other chronic lung diseases will be declined by Mutual of Omaha, but could be accepted for first day coverage by others.
  • Bipolar or schizophrenia diagnosis will be declined by Mutual of Omaha but not by some others.
  • Mutual of Omaha will look back 4 years for cancer, while other companies look back 2 years

It’s worth it to talk to an independent insurance broker, as he will be able to find these options for you. Some of the best plans with the lowest costs are sold exclusively through insurance brokers. Alternatively, you can sign up for the Guaranteed Issue product yourself.

About Al Kushner
Al Kushner
He is a recognized financial educator, best-selling author, speaker, underwriting specialist and the founder & CEO of Superior Mutual, an independent insurance agency. He has helped families and individuals preserve, protect, and pass on a legacy since 1986. His mission is helping hard working seniors keep more of what they have worked a lifetime to save.
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