Insurance Basics - Education - Columbus Life Insurance Company

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Retirement

Role of a Financial Professional

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Insurance Basics

Life Insurance Protects

Understanding Underwriting

Replacing Life Insurance Policies

Additional Resources

There are many types of life insurance. While individuals have varying financial, familial and health situations, life insurance policies are designed in several ways to support many different situations. Term Insurance, Universal Life, and Variable Universal Life differ in many ways and provide varying levels of protection to best fit the policyowner's life needs.

Term Insurance provides coverage for a specified time period, usually with smaller initial premium payments.

Features:

•	Lower initial premiums may fit well into the budget of younger policyholders.
•	Helps to insure that items such as car and house can be paid for in case of early death.
•	Many policies allow you to convert your term coverage into more permanent insurance without evidence of insurability.
•	Return of premium riders on some term products returns the premium paid if you are alive at the end of the term period.

Universal Life offers insurance protection until time of death with guaranteed premium levels and tax-deferred benefit based on current interest rates.

Features:

•	Cash value can be used for a loan, as premium payment, or as collateral.
•	Flexible in terms of premium payment, conversions and upgrades in coverage.

Indexed Universal Life offers growth potential through Indexed Interest Credits with protection from downside risk through a minimum interest rate guarantee. Indexed universal life also offers all the benefits associated with traditional insurance products.

Features:

•	Cash value can be used as a loan, as a premium payment, or as collateral
•	Flexible in terms of premium payment, conversions and upgrades in coverage
•	Enhanced growth potential to help offset inflation risk
•	Upside potential and downside protection

Variable Universal Life gives insurance protection until time of death with payment flexibility, tax deferred accumulation, and diverse investment choices in professionally managed investment portfolios.

Features:

•	Tax favored access to policy values.
•	Payment flexibility to increase, decrease, or suspend premiums.
•	Tax-deferred accumulation.

Joint Survivor Universal Life
Joint Survivor Universal Life is designed so older couples can take advantage of the estate marital tax deductions and then cover estate taxes after the death of the surviving spouse. It usually has cost effective premiums and can be tailored to individual needs with riders.

Annuities
An annuity can provide a stream of retirement income that helps you maintain a comfortable lifestyle for the rest of your life. The type of annuity that's best for you depends on whether you want control over how your contributions are treated and how you would prefer to pay them. A fixed annuity has a fixed rate of return each month. Penalties are charged for surrender or early withdrawal. At retirement age, funds can be withdrawn, usually at a lower tax rate.

Insurance Resources
For more information on the insurance industry and general practices, check these helpful resources:

•	The Life and Health Foundation for Education (LIFE)
•	Life Office Management Association (LOMA)

Updated 9/27/2007