Death brings with it a load of financial hardships and emotional distress, and though you cannot protect your loved ones from the emotional distress, having life insurance might be the best way for you to offer financial security to your loved ones.
If you are considering life insurance, but you don’t know where to start or the type of life insurance to choose from, you will be happy to know that this article shares insights into everything you need to know about life insurance, specifically the policies offered by AIG insurance and Mutual of Omaha.
If you are unsure about the reason for choosing either insurance policy, here are some questions you need to answer: Would your loved ones be burdened with the costs of your burial and funeral if you were to die suddenly? Would they be able to cover the average cost of $7,000 or more upon your death or illness?
AIG Vs Mutual of Omaha: Overview
AIG (American General Life Insurance Company) is one of the popular insurance companies. It offers several life insurance plans, and according to the company, AIG underwrote at least 3.5 million life policies to individuals across the US. If you do the math, this translates to 2.7% of the total US market share.
Generally, most people note that they chose AIG because the company is able to cater to their individual needs through products specific to individual needs, which means that regardless of your situation, you will find a life insurance policy for you.
Mutual of Omaha – Overview
Established in 1909, Mutual of Omaha has been around for over 100 years. This insurance company started with offerings for accidental and health insurance, and it wasn’t until 1926 that the company introduced its life insurance products.
Today, the company offers some of the best life insurance policies, including burial insurance, meaning that you get to choose the options that work best for you.
AIG Vs Mutual of Omaha: Ratings
While AIG’s financial strength is trustworthy, it isn’t unaccredited with the Better Business Bureau, and it also didn’t show up in the J.D Power of the 2019 Life Insurance Study. However, AIG recently received the A-rating from AM Best.
Regarding the company’s ratings from customer satisfaction and complaints, the National Association of Insurance Commissioners, a commission that tracks complaints launched by customers against insurance companies, AIG is ranked a 0.51, which is lower than average. For reference, the baseline for ratings is 1.0 for average customer complaints.
Mutual of Omaha Ratings
Customer ratings are important when it comes to choosing the best life insurance company for you to choose from. The good news is that Mutual of Omaha is one of the top-rated companies, with an A+ rating from Better Business Bureau. Besides the customer ratings, the best life insurance companies are also rated by their financial strength.
Mutual of Omaha has an A+ financial rating for Strong, Good, and Superior rating from S&P Global, Moody’s, and AM Best, respectively. It’s also rated the 3rd best company by the J.D. Power Customer Satisfaction Score.
Comparing these two companies, Mutual of Omaha is a preferable choice for you if you are looking for the best-rated life insurance service provider.
AIG Vs Mutual of Omaha: Types of Policies
So, which are the types of policies offered by these two companies?
AIG: Types of Policies
AIG offers six types of life insurance policies, and we’ll take a look at all of them below. But first, it’s important to note that life insurance is the kind of insurance designed to pay out benefits to you in the event of the death of the policyholder.
For life insurance, the policyholder pays their premiums during the course of the policy’s term, and the death benefit in a lump sum is only paid when the policyholder dies. These death benefits are paid to the beneficiaries that are listed in the life insurance policy.
Before we look at the specific types of life insurance policies, it’s important to note that life insurance policies fall into two categories – permanent and term insurance policies.
Term policies refer to the life insurance policies designed to last for the specified terms, often between a period of 10-30 years. The length of term insurance is determined at the beginning of your policy. You could also set the insurance policy in 5-year term increments.
However, these policies have no value in addition to the death benefit, and the value of the policy is only paid to the beneficiaries when the policyholder passes away.
On the other hand, permanent life insurance is without specified terms, and it lasts throughout the policyholder’s lifetime. The death benefits from the permanent life insurance policy are paid out only after the death of the policyholder unless there was a violation of the rules of the policy.
In addition to the cash benefits, the permanent life insurance policies come with an added cash value that grows with the premiums paid for the policy. And the best part is that the cash value will earn interest, and you can borrow the amount against the loan.
With the basics out of the way, let’s look at the six main types of insurance policies offered by AIG.
Term life insurance
AIG offers a term life insurance policy for persons looking for a more affordable insurance option. AIG’s term policies are renewable, meaning that if at the end of the policy’s term, you still wish to keep the policy going, you can renew it. Also, AIG allows you to convert the term life insurance policy into a permanent life insurance policy.
Quality of Life Term (QoL) Life Insurance
This life insurance policy is specific to AIG. It is a term policy that comes with rider living benefits. The Living benefits refer to the proceeds that are paid up by the policy while the policyholder is still alive.
These living benefits could be claimed by the beneficiaries in the event that the policyholder has qualifying critical, chronic or any form of terminal illness that warrants the actions of the beneficiaries.
The QoL Plans are broken down into the following products:
- The QoL Guarantee Plus GUL II – this refers to the insurance policy that offers guaranteed death benefits, as well as cash values. Holders of this plan also have access to the accelerated death benefits, often provided to cover the cost of care, the replacement for lost income, and also, the funds are ideal for you if you need the reassurance of your quality of life in case of a terminal illness diagnosis, critical illness, or chronic illness. This plan comes with guaranteed accelerated benefits with a maximum of up to $2,000,000. You also have the option of canceling the plan at the end of year 20, and you’ll get up to 50% of the premiums paid.
- The QoL Max Accumulator+ – This plan comes with the QoL options, as well as a number of investment options attached to your plan’s cash value and the death benefits. The plan also offers flexible premium payments, you get to choose the value of the death benefits, and also, you get to choose how you’d like to earn interest on your account. The best part is that you have control over the account’s interest-earning potential.
- Finally, there is the QoL Value+ Protector – in addition to the options offered under the Quality of Life plans, this plan also features the guaranteed death benefits insurance coverage offered up to 100 years. You also get to choose the amount you will pay in premiums, the frequency of making insurance payments, the death benefits, as well as the option to assign a mix of investment products, specifically the options that you’d like to earn interest on.
Whole Life Insurance
AIG also offers whole life insurance. It is the most common type of permanent life insurance. This policy is meant to last for the duration of the policyholder’s life, with the premiums set at the beginning of the life policy, without changing.
If you are looking for AIG’s whole life insurance policy, you will be happy to note that AIG offers two types of whole life insurance policies – the Universal and the Guaranteed life insurance policies.
- Universal Life Insurance – This policy is an adjustable policy that allows you to change the terms of the policy while you are still alive. What this means is that the value of the policy’s benefits can be lowered or raised to meet your changing needs in the course of your life. At the end of the policy (end of your life), the policy’s benefits will include the policy’s cash value and its tax benefits.
- Guaranteed Issue Whole Life Insurance – this is the second type of whole life insurance offered by AIG. It’s a guaranteed insurance plan that’s ideal for seniors in the 50 – 80 years age group. This insurance policy is unique because, unlike other insurance policies that are only approved after a thorough medical exam is conducted, you don’t need a medical exam to qualify for the guaranteed issue whole life cover. This insurance policy also falls into the burial insurance or the final expense insurance policy, and it’s a preferred insurance option for seniors.
Accidental Death Insurance
AIG also offers this limited life insurance that’s designed so that its benefits are only paid out to you or your beneficiaries in case you suffer serious injuries (say, if you lose a limb, are paralyzed, suffer blindness) or are killed from an accident.
Mutual of Omaha Life Insurance Policies
Now that you know what AIG has to offer in terms of their life insurance policies let’s look at insurance policies offered by Mutual of Omaha.
Keep in mind that when it comes down to life insurance, there is no one-size-fits-all plan or insurance product, which is why there are several plans for you to choose from.
And even after selecting one type of insurance, you will realize that the policies are all different, and you and your siblings will end up with different policies.
So, which products do you get from Mutual of Omaha?
- Term Life Insurance
Like AIG’s term life insurance, this policy represents the cheapest and often the most affordable type of life insurance that you could sign up for. Mutual of Omaha offers attractive term insurance products with varying term lengths of 10, 15, 20, and 30 years.
And like AIG’s, you could have the term policy converted into a permanent life insurance product, as long as you request this conversion before the expiry of the policy.
- Whole Life Insurance
This insurance product is available in two forms – the universal life or whole life, and you get to choose one or the other depending on your needs/preferences.
Essentially, the whole life product comes with a guaranteed use feature, which means that you will qualify for the product without undergoing a medical examination or filling in long medical questionnaires, hence the name guaranteed whole life policy.
The other advantage of this plan is its death benefit payout, in which the policy grows a cash value while alive, and you can use it. It’s suitable for individuals aged 45 – 85, and the policies cost anywhere from $2,000 and $40,000.
On top of all that, this whole life insurance product is affordable and conveniently set up so that the premiums payable remain unchanged for the duration of the policy (for as long as you live). And you may like that the cash value of the policy is tax-deferred, even as it earns a certain percentage in interest – it offers 100% risk-free gains.
The other impressive feature of this insurance product is that Mutual of Omaha promises to pay up to 85% of the received claims within 24 hours.
- Universal Life Insurance
Under whole life insurance, Mutual of Omaha offers the Universal Life Insurance policy. This insurance product gives you a lifetime of protection/coverage, and it stays active for as long as you pay your premiums.
Under this policy, there is an Income Advantage product. This is an indexed product that’s tied to an index fund, and it tracks the S&P 500’s performance, meaning that you get to earn extra on the cash value of your insurance product.
This policy is also very flexible, and the best part is that you can change the frequency with which you pay the premiums, and you also get to adjust the death benefits when necessary. Its cash value grows, and you get to grow your money thanks to investments in products like mutual funds.
In addition to the Index-fund-tied Income Advantage product, the Universal life insurance product also features these two other products – the Life Protection Advantage with guaranteed refunds and accelerated death benefits; and the AccumUL Answers that earn a 2% pa declared interest rate.
These policies with investment options are also called the Variable Universal Life Insurance Policies.
AIG Vs Mutual of Omaha: User Reviews
According to NAIC, AIG received a total of 193 complaints in 2019 alone and an average complaint score of 1.42. This score is above average, meaning that the company offers good services/products. The common complaints launched against AIG, however, include delays in communication and a concerning number of no-response complaints.
Mutual of Omaha, on the other hand, recorded only 50 complaints in 2019, and the reviews of the company have been consistently high over the years.
AIG Vs Mutual of Omaha: Costs Comparison
So, how much is life insurance offered by AIG and Mutual of Omaha?
AIG – Cost of Life Insurance
The average cost of the life insurance policies offered by AIG is $160 annually for the $250,000 term policy if the application is made by a healthy 30-year-old.
Unfortunately, AIG doesn’t offer quotes online.
Regarding premiums, anyone between 30 and 55 pays less than $20/month, between $40 and $60 if you are between 55 and 65; and if you are over 70 years, you will pay monthly premiums of between $60 and $90.
Some of the factors that affect the premiums paid include your sex and health status.
Mutual of Omaha – Cost of Insurance
Mutual of Omaha, on the other hand, offers more affordable premiums to individuals between 45 and 85 years. The premiums are fixed based on your age that you are when buying the policy, with an increase in premiums every five years. Also, for the burial insurance policies, the maximum death benefits paid is $20,000.
For term life insurance policies from 25 years, the premiums paid to start from $13.33 to $55.47; and $30.75 to $122.34 for 45-year-olds.
AIG Vs Mutual of Omaha: Pros & Cons
AIG – Pros and Cons
- There is a wide range of budget-friendly products.
- No medical exams required.
- There are several plans for Quality of Life under the living benefits insurance plan.
- No waiting periods for the policies
- Money-back options offered
- Term life policies offered up to a maximum of 35 years.
- Universal life policies available
- There are policies with guaranteed cash benefits/values.
- The complaints ratio is above average.
- Inconsistent ratings
- Whole life options are limited.
- No online quotes
Mutual of Omaha – Pros and Cons
- Several options to choose from
- Above-average ratings
- Affordable premiums
- Great burial insurance products
- No online quotes
- The graded death benefits option offered on some plans is not the best for most people
AIG Vs Mutual of Omaha: Life: Which is better?
Looking at the life insurance products offered by AIG insurance and Mutual of Omaha, these two companies are among the best. But if you are to choose one that offers the best products with the least number of complaints, the Mutual of Omaha is a better option. That said, AIG offers impressive products with investment options and added value benefits, meaning that it may be a good option if you need an investment option, in addition to the benefits from the life insurance payout.
If you are looking for life insurance and aren’t sure if you should choose AIG or Mutual of Omaha, we Sope that this article sheds some light on the important features of life insurance and everything you need to know about the best products for you to choose.