Insurance Basics

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

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


  • Lower initial premiums may fit well into the budget of younger policyholders.
  • Helps to ensure 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

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


  • 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

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.


  • 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

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.


  • 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.


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 information contained herein is general in nature, is provided for informational purposes only, and should not be construed as legal or tax advice. This material is not intended to be used, nor can it be used by any taxpayer, for the purpose of avoiding U.S. federal, state or local tax penalties. This material is written to support the promotion or marketing of the transaction(s) addressed by this material. This material is being provided for informational purposes only. Columbus Life does not provide legal or tax advice. Laws of a specific state or laws relevant to a particular situation may affect the applicability, accuracy, or completeness of this information. Federal and state laws and regulations are complex and are subject to change. Consult an attorney or tax advisor regarding your specific legal or tax situation. There are insurance related costs to a life insurance policy. Premiums paid must produce sufficient cash value to pay insurance charges.

Policy Benefits are not mutually exclusive. Loans will accrue interest. Loans and withdrawals will reduce the Death Benefit and Cash Surrender Value and may cause the policy to lapse. Loans and withdrawals may be subject to other fees and charges.
© 2014 Columbus Life Insurance Company

Updated 09/02/2015