How can you use Mutual of Omaha’s Guaranteed Refund Option Rider to create $0 cost life insurance?

Jerry Thomas Advanced Planning, Business Planning, Case Study, FIT Credit, Guaranteed Refund Option, Life Insurance, Mutual of Omaha Leave a Comment

Guaranteed Refund Option Rider Overview

If the client no longer needs their coverage, Mutual of Omaha’s GUL and GUL Plus policies have a Guaranteed Refund Option rider. This option provides the client with seven 60-day windows in which they can receive their premiums back – up to 50 percent at the end of year 15 and up to 100 percent at the end of years 20, 21, 22, 23, 24 and 25.1,2 This money can be used to supplement retirement savings, purchase an income annuity, pay for long-term-care insurance, invest in a vacation home or for any reason the client chooses.

Case Study

Bill needs $2,000,000 of coverage for the next 20 years but may need less down the road after he sells his closely held business and gifts his assets to family members to reduce any federal or state estate tax obligations…

Currently most GUL policies offer a lower premium than traditional cash value policies but offer no “bail out” provision if needs change.

“What can Bill do that will offer him a low cost solution but give him the flexibility to make changes as needed down the road?”

With Mutual of Omaha’s Guaranteed Refund Option Rider Bill can purchase two policies for $1,000,000 of coverage equal to a total of $2,000,000 of coverage without incurring any additional policy fees. If at age 71 Bill only needs $1,000,000 of coverage he can surrender one of the two policies and Mutual of Omaha will refund the premiums he has paid in during the 20th policy year.

VC Male 51 Preferred NS $1,000,000 Mutual of Omaha GUL Guaranteed to age 100

Below is an example of how this would look like over a lifetime.

Mutual of Omaha Case Study Example Guaranteed Refund Option $2,000,000 Coverage

Overall your client will have the option to either keep both policies or surrender 1 or 2 policies if something were to change. This gives you and your clients options to make changes in their plan down the road while providing a low cost solution now and a refund option in the future.

Want us to Run a Quote or Scenario?
Contact J.L. Thomas & Company Sales Team for a quote or to review a specific case you are working on.

Don’t Forget!
Ask about Mutual of Omaha FIT Credit program on tough underwriting cases, how to use their chronic illness rider for a LTC decline, and their business valuation service.

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