Mutual of Omaha Boosts IUL Lineup with Protection Focused Product
June 10, 2017 by Jay Cooper
Mutual of Omaha has added a protection-focused indexed universal life (IUL) offering to round out its product suite in the space. Life Protection Advantage Indexed Universal Life Insurance is geared largely to younger individuals, generally between age 35 and 50, looking for lower premiums and potential lifetime coverage.
“This is for [consumers] who are looking for affordable premiums, not those looking to dump a lot of money into the policy to get out later,” explains Joe Kenny, Mutual of Omaha VP and actuary.
The product is the second IUL offering from the company. Last year, Mutual of Omaha launched its Income Advantage Indexed Universal Life product. It was geared toward an older consumer base looking to overfund and use the cash value buildup in retirement.
With an income disbursement product and now a protection-focused product in the market, Mutual of Omaha has likely completed its IUL product development for the time being, though it remains open if it sees another niche to fill, Kenny says.
The new product offers coverage to age 120 on a non-guaranteed basis, and offers guaranteed coverage to age 85 for those who opt for a higher premium.
“This product can provide long-term death benefit protection for a low premium, even when using a conservative index return, plus the opportunity to pay a premium that will guarantee coverage to age 85,” Kenny says.
Life Protection Advantage IUL offers three different indexed interest crediting strategies, each based on the S&P 500 Index. The first option is a 100% participation strategy, which caps at 9.5%. The second option offers a 140% participation rate with a 7.5% cap. The third option has no cap, but a participation rate of 55%.
Mutual of Omaha has introduced other features it hopes will differentiate the product from other IUL offerings in the market. Kenny believes Life Protection Advantage is the only IUL to offer a guaranteed refund rider. The rider allows customers to surrender the policy for a 50% return of their premiums at the 15th policy anniversary or a 100% return of premiums at the 20th through 25th anniversaries.
Life Protection Advantage automatically includes Accelerated Death Benefit riders, which allow early access to a portion of the death benefit for customers diagnosed as chronically or terminally ill.
As of June 1, Mutual of Omaha’s Life Protection Advantage product has been available for customers to purchase through licensed agents and brokers in all states except New York and the Virgin Islands. Mutual of Omaha issued $329 million of annualized premium in 2016, which included $17.5 million of IUL.