Independent Review of the Mutual of Omaha Flexible Premium Annuity (FPA)
What will we be covering in this annuity review?
In this annuity review, we will be going over the following details regarding the Mutual of Omaha Flexible Premium Annuity (FPA):
- Product type
- Current rates
- Realistic long-term expectations
- How the annuity is best used
- How the annuity is most poorly used
Annuities can be complex. That’s where having an Annuity Investigator who loves math comes in.
We make the complex, simple.
For anybody who may be thinking about purchasing an annuity in order to ensure that income will continue flowing in (regardless of how long you need it), as well as knowing that principal will be safe, then the Mutual of Omaha Flexible Premium Annuity (FPA) could be a good option for you.
One reason for this is because no matter what happens in the volatile stock market – or even in the economy overall – your money will be safe inside this fixed annuity product. In addition, when the time comes to convert the annuity funds over into an income stream, those payments will keep coming in, alleviating the worry of running out of income before you “run out of time.”
However, before you jump into a long-term financial commitment with the Flexible Premium Annuity, or FPA, from Mutual of Omaha – or with any annuity, for that matter, it is essential that you have a good understanding of the benefits that it can provide you, as well as any of the features that could be a drawback.
For instance, even though fixed annuities can offer a long list of nice guarantees, they can be quite difficult to get out of once you’ve gotten in. Given the long surrender charge on these annuities, it could also be quite expensive! So, it is best to know all that you can before you say yes to this product.
Over the past several years, fixed annuities have risen in popularity – particularly with people who are retired and those who are approaching that time in their lives. However, due in part to this increase in demand, there are many insurance companies that have been coming out with new products. And, while it can provide you with many more options, doing so has also ended up making an already confusing product even more so.
Because of that, unless the insurance or financial advisor that you work with really know the ins and outs of annuities, it may be necessary for you to do some additional research, as annuities can typically require a substantial amount of your overall savings.
This is where we come in.
Annuity and Retirement Income Planning Information That You Can Trust
If you have never been to our website before, please allow us to personally welcome you here. At Annuity Gator, we are a team of experienced financial experts who are dedicated to helping you decode the complicated world of annuities. We strive to create unbiased, yet highly comprehensive, annuity reviews – and we have been at this for far longer than most of those “copycat” websites out there.
Annuities are a highly unique insurance product in that they are the only financial vehicle that can make the promise of providing you with a lasting, lifetime income stream. Unfortunately, though, some insurance and financial services advisors – albeit unintentionally – will tend to make them sound better than they actually are.
Not that they are trying to mislead their clients. Most of them aren’t. But many of these professionals just simply don’t know the intricate details about annuities. Also, in order to obtain the nice benefits and guarantees that you can get with a fixed annuity, there are oftentimes also some tradeoffs that you need to make. So you need to know just exactly what you might have to give up in order to get the guarantees and other benefits an annuity can provide.
Many annuity sales reps, and even many of the annuity websites that you’ll see online will make some pretty bold claims about the performance of the annuities that they offer, such as:
- 7 to 8% return
- Low fees
- Guaranteed income for life
- No market risk
Does this look familiar?
Our goal in providing this annuity review is to provide you with information about the features and benefits of the FPA, and to also help you with better understanding what owning this product could mean to you and your financial situation, both now and in the future.
So, if you’re ready to begin, let’s go ahead and dive in!
Mutual of Omaha Flexible Premium Annuity (FPA) at a Glance
|Product Name||Flexible Premium Annuity (FPA)|
|Issuer||Mutual of Omaha|
|Type of Product||Fixed Deferred Annuity|
|S&P Rating||AA- (Very Strong)|
|Phone Number||(800) 205-8193|
Opening Thoughts on the Mutual of Omaha Flexible Premium Annuity (FPA)
Mutual of Omaha has been in the business of providing financial stability and protection to its customers since 1909. The company has thrived financially throughout the years, even through depressions and recessions.
This insurer offers a long line of life insurance, annuities, and health coverage such as Medicare Supplement.
Mutual of Omaha and its affiliates have received high ratings from the insurer rating agencies, including a(n):
- AA- from Standard & Poor’s
- A+ from A.M. Best
- A1 from Moody’s Investors Service
Given that people are living longer lives (on average) today, knowing that you have a guaranteed source of income can be comforting – particularly if you have chosen the lifetime income option, which will provide you with an incoming cash flow for as long as you need it (as well as for the lifetime of another individual, such as your spouse, if you choose that option).
However, even though it is nice to be able to count on a lifetime income stream before you move forward with a long-term, non-reversible financial commitment, there is some information that you need to know.
Before getting into the nitty-gritty details, here are some necessary legal disclosures…
This is an independent annuity product review. It is not a recommendation to purchase or to sell an annuity. Mutual of Omaha has not endorsed this review in any way, nor do we receive any type of compensation for providing this review. This annuity review is meant solely to be an independent review at the request of our readers so that they may see our perspective when breaking down the positives and the negatives of this particular annuity. Prior to committing to the purchase of any type of insurance and/or investment vehicle, it is critical that you do your own due diligence, and that you also talk with a properly licensed professional if you have any questions that relate to your specific situation. All of the names, materials, and marks that have been used in compiling this annuity review are the property of their respective owners.
For additional information on how to compare fixed annuities so that you can decide which may be the best one for you, click here in order to obtain our free annuity report.
How Mutual of Omaha Describes the Flexible Premium Annuity
Mutual of Omaha describes its Flexible Premium Annuity as a flexible premium deferred annuity with a fixed interest rate. Rather than having to contribute just one, single premium, this annuity allows much more flexibility in its contribution options.
While the interest rate on fixed annuities has traditionally been quite low, there are some ways that you can help to boost your return with this particular annuity. For example, there is an additional 1% interest rate that can be gained in the first year. And, there is also an additional 0.15% added to the interest rate on accumulation values in excess of $50,000.
As with other annuities, growth that takes place within the account is tax-deferred, meaning that no tax is due on the gain until the time of withdrawal. There is also a death benefit on this product, whereby if the annuitant passes away before receipt of income, the beneficiary will receive the accumulation value of the contract (minus any applicable premium tax).
How an Insurance or Financial Advisor Might “Pitch” this Product
Given our longer life expectancy these days, worry about running out of retirement income is a very real fear. This is one reason why fixed annuities have grown in popularity of late, as they can offer you the assurance of income for the remainder of your lifetime.
Because of that, if you’ve been presented the Mutual of Omaha Flexible Premium Annuity by an insurance or financial professional, it is likely that they have focused heavily on such guarantees.
Likewise, insurance and financial professionals will also key in on the fact that your principal will be safe, and that you can essentially lock in a set rate of interest for a certain number of years – regardless of what occurs in the market, or even in the economy overall.
However, while having these assurances can certainly help you to sleep better at night, the reality is that the interest rates today (and for the past decade or so) that are offered on fixed annuity products would have you hard pressed to meet, much less beat, inflation. And this could lead you to struggle financially when trying to keep up with the rising cost of the goods and services that you’ll need to purchase in the future.
What About the Fees on the FPA Annuity from Mutual of Omaha?
While there is no up-front sales charge for this annuity, don’t let that lure you into believing that there are no charges or fees at all. That’s because you could still end up handing over a chunk of your annuity’s value if you opt to take withdrawals during the surrender period.
In this case, withdrawal charges will be in effect for eight full years after you purchase the Flexible Premium Annuity from Mutual of Omaha. These start at 8% and gradually grade down over time.
The Annuity Gator’s End Take on the Mutual of Omaha Flexible Premium Annuity
Where it works best:
While it may not be right for everyone, this annuity will usually work the best for those who are looking for the following benefits:
- Guaranteed lifetime income
- Safety of principal
- Interest rate guarantee – at least for a certain period of time
Where it works the worst:
This annuity may not be an ideal fit if you:
- Want access to most or all of your funds within the first eight years (during the surrender charge period)
- Are seeking a high rate of return on your money
- Do not anticipate using the annuity for lifetime income
If you want to really compare the best annuity options for you, click here so that you can download our free annuity report.
There are many different factors that you should ideally consider when you are thinking about the purchase of an annuity. That is because these products are a long-term commitment. Therefore, you should know how the annuity will produce a return, as well as how safe your money is inside the contract, and how (and when) the income from the annuity will pay out.
If you’re still leaning towards purchasing the Flexible Premium Annuity (FPA) from Mutual of Omaha, you can be sure that your money will be safe – and that you will also be able to count on a guaranteed income stream for the remainder of your lifetime (regardless of how long that may be).
However, you also need to consider some additional criteria, and the only way to truly know whether or not this particular annuity will be right for you is to have it tested. We can perform this test for you, based on your specific financial parameters, and we can do so for you free, with no obligation. So, if this is something that is of interest to you, all you need to do is just contact us here through our secure online contact form.
Do You Still Have Questions? Did You Notice Any Mistakes in this Review?
We know that this annuity review was a tad bit lengthy – and for that, we thank you for sticking with us here to the end. But our feeling is that we would much prefer to give our readers a bit too much detail than not enough.
So, if you found that this review was beneficial for you, then please do feel free to share it and to forward it on to anybody else that you think may also benefit from it. Also, we know that the details about annuities – and other financial products, too – can and do change somewhat quickly. With that in mind, if you happened to notice anything in this review that needs to be corrected and/or updated, please let us know that as well, and we will get on the revisions right away.
Are there any other annuities that you would like to see information about?
If you would like to see reviews on any other annuity (or annuities), our team of annuity “geeks” will get on the ball and get them on our website. Just simply click here to let us know which product (or products) you are interested in seeing. And, be sure to check back soon.
The Annuity Gator
P.S If you would like to read more of our Mutual Of Omaha annuity reviews here are some links to check out:
- Mutual of Omaha Ultra Secure Plus 7 Year Annuity
- Mutual of Omaha Ultra Secure Plus Fixed Deferred Annuity
- Mutual of Omaha Bonus Flexible Fixed Deferred Annuity
- Mutual of Omaha Ultra Income Immediate Annuity
- Mutual of Omaha Income Access Immediate Annuity