Mutual of Omaha Secure Solutions & Custom Solutions Review – Affordable Long-Term Care Protection!
There are two things that make Mutual of Omaha stand out in the long-term care insurance industry. First, Mutual of Omaha has been in the long-term care insurance industry for over 30 years. Second, they have paid over $1.1 billion in benefits for their insureds.
Now, the traditional long-term care insurance market has seen an exodus of insurance carriers in the past decade. Nevertheless, Mutual of Omaha has stayed the course and is still running strong.
Mutual of Omaha’s Traditional Long-Term Care Insurance is a viable option for long-term care coverage. In this article, I will do an in-depth review of their product as well as answer some common questions and concerns regarding Traditional Long-Term Care Insurance.
So let’s jump right in.
Two Products Available – Secure Solutions & Custom Solutions
First, it is important to know that Mutual of Omaha offers two stand-alone long-term care insurance policies: Secure Solutions and Custom Solutions.
Secure Solutions is pretty standard and offers a basic policy design. Custom Solutions on the other hand offers more flexibility by allowing you to tailor your policy to fit your needs.
In order to qualify for a policy, you must be between ages 30-79 (may vary in some states).
How Do These Products Provide Benefits?
Mutual of Omaha Secure Solutions and Custom Solutions are reimbursement policies. Benefits are paid to you or a LTC facility once you have submitted copies of bills or receipts for qualified expenses.
However, in order to receive benefits, you must first be eligible for claims and satisfy the elimination period.
Although Mutual of Omaha’s products are reimbursement policies, they do offer a cash benefit option each month. This is great because it gives you added flexibility in how you use your policy’s benefits!
In addition, there is no elimination period for receiving cash benefits! You can get it as early as your 1st day claims!
The available cash benefit is 25% of home health care benefits up to a maximum of $2,000 per month. The cap does rise as the inflation option increases your monthly benefits.
It is important to note however, you cannot receive both cash benefits and reimbursements at the same time. It is “either or” with Mutual of Omaha.
Nevertheless, the cash benefit option is still a great option to have in your policy as you never know when you may need liquidity during a long-term care event.
Now let’s look at the Elimination Periods for both Mutual of Omaha’s Secure Solutions and Custom Solutions.
Elimination Period
When it comes to the elimination period, Secure Solutions offers you the basic 90, 180, or 365 calendar day options. Custom Solutions offers more options. It allows you to choose an elimination period of 0, 30, 60, 90, 180, or 365 calendar days.
Typically I find the 90-day elimination period to be the standard and the most commonly selected option. It is also the default selected elimination period if no elimination period is selected on the application.
Now let’s look at the available Inflation Protection Options.
Inflation Protection Options
The Inflation Protection Options for Mutual of Omaha’s Secure Solutions are standard. Secure Solutions offers a a 20 year option of 3% or 5% compound interest and a lifetime option of 3%, 4%, or 5% compound interest.
Mutual of Omaha’s Custom Solutions on the other hand offers a little bit more control over its inflation options. You can choose an inflation protection option ranging from 1% – 5% compound interest at .25% increments. You can also choose between an inflation duration of 10 years, 15 years, 20 years, or lifetime.
In addition to the flexibility, Custom Solutions also has built in buy-up inflation protection available. This allows you to increase the inflation protection option during the life of the policy. You never have to exercise this option but it is there when you need it.
I must note however, that you can exercise the buy-up option only in the first 20 years of your policy or until age 75, whichever comes first.
Mutual of Omaha’s Custom Solutions, also allows you to lower your inflation protection option! This is a great option as it can also help you to control your policy costs in the future. You can lower your inflation option down to 1% thus lowering your policy’s premium.
Now let’s review some of Mutual of Omaha’s key features in their long-term care insurance products.
Key Features – Mutual of Omaha Long-Term Care Insurance
Shared Care Benefit
Mutual of Omaha’s long-term care insurance products do offer some great optional partner benefits! For example, they offer a Shared Care Benefit.
If a couple applies for the same level of coverage and effective date, each individual can use their spouse’s benefits once they have exhausted their own benefits.
In addition, let’s say one spouse passes away, the deceased spouse’s pool of benefits is rolled over to the surviving spouses benefits with no increase in premiums!
Security Benefit
Another partner benefit Mutual of Omaha’s Secure Solutions and Custom Solutions offers is their Security Benefit. With the Security Benefit, you can receive a cash indemnity benefit for an uninsurable spouse or a spouse that was declined.
It typically pays 60% of the claimed benefits every month when the healthy insured spouse goes on claims. It also does not reduce the insured spouse’s pool of benefits.
This benefit helps the insured spouse be able to take care of their uninsurable spouse. However, it does typically add a noticeable increase in premium.
Waiver of Elimination Period for Home HealthCare
Other optional benefits include Waiver of Elimination for Home Healthhcare. This is a great benefit and one I strongly encourage my clients to get. Since most long-term care claims start at home, it only makes sense to waive the elimination period so you can get benefits from Day 1.
This benefit is pretty straightforward. If you have a 90 day calendar elimination period in yorur policy, the elimination period is waived if your claim starts with home healthcare. In addition, any days paid under the home healthcare apply towards the elimination period if you go into a nursing facility. This is another great feature!
Return of Premium (Less Any Claims Paid)
Both Mutual of Omaha’s Secure Solutions & Custom Solutions offer a Return of Premium Benefit that you can add to your policy.
Both Secure Solutions & Custom Solutions offer a Return of Premium of three times the initial maximum monthly benefit. However, The policy must be in force for at least 10 years.
Custom Solutions also offers two additional Return of Premium options. The first one is a Return of Premium at Death less any claims paid. The second option is a Return of Premium at Death less any claims paid if death occurs before age 65.
The Return of Premium at Death less any benefits paid is the most expensive of the three available options.
Other Partner Benefits
There are other optional partner Benefits that Mutual of Omaha offers on their products as well. Here are the other available benefits:
- Nonforfeiture benefit – If for any reason you stop paying premiums after your policy has been in force for three years, your coverage may continue on a reduced basis
- Joint Waiver of Premium (Custom Solutions only) – If one spouse goes on claims, the premium is waived for both spouses.
- Survivorship Benefit (Custom Solutions only) – If one partner dies after both policies have been in force for 10 years, the premium is waived for the surviving partner for the remainder of his or her lifetime.
- Professional Home Healthcare Benefit – You can get up to 100% in additional monthly benefits if you choose to stay at home and the services provided specifically by a nurse or skilled professional exceed your maximum monthly benefit
Now that we have covered key features for Mutual of Omaha’s LTC products, let me address some common concerns regarding this product.
Common Concerns Regarding Mutual of Omaha Long-Term Care Insurance
One common concern regarding Traditional Long-Term Care Insurance is a possible rate increase while the policy is in-force. My article “Traditional Vs. Hybrid Long-Term Care Insurance” discusses this topic more in detail.
Looking back at the long-term care insurance industry over the last 10 years, future rate increases is an understandable concern. However, many carriers who are still in the industry have learned from past mistakes.
There were many missed assumptions which led to such large rate increases on past blocks of business. For example, companies thought lapse rates would be higher than they calculated. However, what they soon realized was people that buy long-term care insurance they tend to keep it.
Another missed assumption was the interest rate. Companies did not predict that interest rates would be as low as they were for as long as they were in the last decade.
Nevertheless, surviving long-term care insurance companies did learn from this experience. They gained more understanding of claims filed, the frequency of claims, and how long claims last. This helped to adjust their actuarial projections and expectations for future business.
Mutual of Omaha’s Rate Increase Experience
Mutual of Omaha was fortunate as their initial block of business was not affected as adversely as other companies. In addition, Mutual of Omaha made changes to help stabilize their products.
For example, Mutual of Omaha no longer offers lifetime benefits on their products. This helps keep premiums stable as some of the risk is shared with the insured. In addition, they no longer offer restoration of benefits if a policy lapses. This also helps create premium stability.
Lastly, Mutual of Omaha also offers one more bright spot. Their block of business on their 2009 LTCi product has not seen any rate increases! The company is very hopeful and optimistic it will remain this way!
Taxes
One commonly asked question regarding long-term care insurance is if it is tax deductible. The question to that answer is “Yes.” However, individuals may deduct premiums as follows:
Qualified LTC premiums combined with other un-reimbursed medical expenses are deductible to the extent they exceed 10% of the taxpayer’s adjusted gross income.
In order to do this, you must itemize deductions (Schedule A, Form 1040) and you may deduct an amount up to the eligible premium (check IRS tax-deductiblity of long-term care insurance premiums for the tax filing year).
Other tax considerations include paying eligible LTCi premiums from a Health Savings Account (HSA) or a Medical Savings Account (MSA).
Please note, qualified LTC benefits are tax free to the extent they do not exceed the greater of qualified long-term care expenses or the HIPPA per diem rate set by the IRS for the tax year ($380 /day in 2020).
Nevertheless, this should not be considered tax advice and you should consult your tax advisor for more information.
Sample Rates Below – Mutual of Omaha Long-Term Care Insurance
Mutual of Omaha offers different discounts for individuals applying for Long-term care insurance. Here is a list of the discounts they offer:
- 15% Partner discount (both issued)
- 5% Partner discount (one issued)
- 15% Preferred
- 5% Association group, Producers, or Common Employers
- Combination of good health and household discount is not limited
Let’s take a look at some sample rates to see how these discounts are applied. Here are some sample rates for married couples as of October 2020. The rates are for:
- A Monthly Benefit of $3,500
- A Benefit Period of 36 months
- A 3% Lifetime Compound Inflation Option
Mutual of Omaha Sample Rates
| Ages (Couples Discounts) | Premiums (Annually) |
|---|---|
| 55 | $4,394 |
| 60 | $5108 |
| 65 | $6,339 |
| 70 | $8,121 |
If a married couple applied for a Secure Solutions policy, they would receive a 15% partner discount. The discount is reflected in the premiums listed above.
Mutual of Omaha Long-Term Care Insurance is Worth It!
If you are considering Long-Term Care Insurance, Mutual of Omaha can definitely be in the conversation due to affordability and quality.
With such a long-standing history, they have proven to “weather the storm” regarding rate increases. In addition, their Custom Solutions product can easily be tailored to meet your needs.
Again, overall, it is a quality product being offered at a quality price!
Get Free Quotes Today!
I have access to all available long-term care insurance companies. I am also licensed to sell insurance across the country.
Feel free to give me a call now at 1(800) 498-3955 or schedule a call below. I look forward to speaking with you!
Michael B. Chapman