Frequently Asked Questions
ColumbusLife.com's FAQs section provides answers to the most frequently asked questions about our company, products, and services. Below is a brief summary of the different kinds of FAQs listed here for your quick reference:
General FAQs
Product FAQs
- Basic Life Insurance FAQs
- Term Life Insurance FAQs
- Universal Life Insurance FAQs
- Variable Universal Life
- Annuity FAQs
General FAQs
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Product FAQs
Basic Life Insurance FAQs
- Do I need a medical exam to qualify for life insurance?
- What is the maximum age that I can purchase life insurance?
- What is a rider?
- What are the differences between a policy owner, the insured, and the beneficiary?
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Term Life Insurance FAQs
- What is term life insurance and how does it work?
- What are the advantages of purchasing a term life insurance product?
- What is a return of premium rider?
- Must my spouse and I both purchase a policy?
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Universal Life Insurance FAQs
- What is universal life insurance?
- What is the key feature of universal life insurance?
- What are the two most common available universal life death benefit options?
- How does the universal life account value grow?
- What are some of the tax advantages provided by universal life insurance?
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Variable Universal Life Insurance FAQs
- What is Variable Universal Life Insurance?
- How does it differ from Universal Life Insurance?
- How does my Variable Universal Life account value work?
- How can I determine my account value?
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Annuity FAQs
- What is an annuity and how does it work?
- If I place my money into an annuity, will I be able to easily access it like I can with my checking account?
- What is the difference between an annuity and a Certificate of Deposit (CD)?
- How do I know which annuity is right for me and what the different characteristics are for each product?
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General FAQs
Who is the Columbus Life Insurance Company?
Columbus Life Insurance Company provides life insurance and annuity products that meet the needs of affluent customers, professionals, and businesses throughout the nation. Columbus Life operates in 48 states and the District of Columbia through a nationwide network of independent producers and registered representatives. Columbus Life is a member of Western & Southern Financial Group a dynamic family of diversified financial services companies that provide life insurance, retirement planning and investment products and services to help millions of consumers nationwide to plan and protect their futures.
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How can Columbus Life help me plan for my retirement?
Columbus Life can provide you with the financial plan you need to ensure that your golden years really will be golden. Because Social Security and pension benefits may cover only about one third of total retirement expenses, most retirees have to use personal savings and investments to make up the difference, and the cost of delaying retirement planning can be very significant.
Here's an example:
Amazingly, by delaying saving just 10 years, you will be forced to save $185 more per month to accumulate $100,000. Most financial planners agree that time can be your greatest friend or worst enemy when building a secure retirement.
Whatever your financial goal, the cost of waiting can be great. Columbus Life offers many insurance and annuity products to help you reach your retirement goals.
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Product FAQs
Basic Life Insurance FAQs
Do I need a medical exam to qualify?
Not all life insurance requires a medical exam to qualify for coverage. The need for medical exams will vary based upon the type of insurance for which you are applying, your age, and the face amount of the policy. If a medical exam is required, The Columbus Life Insurance Company will cover all expenses incurred in the exam and will provide you with all necessary documentation.
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What is the maximum age that I can purchase life insurance?
We offer a variety of products that all have their own separate maximum ages to purchase. Typically, you can purchase life insurance up until your 79th birthday. (Please consult with your Columbus Life representative for details.)
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What is a rider?
A rider is an amendment to an insurance policy that becomes part of the insurance contract and expands or limits the benefits. These options help to make your policy more specific to your insurance needs.
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What are the differences among a policy owner, the insured, and the beneficiary?
The policy owner is the person who owns the insurance policy, while the insured is the individual whose life is insured. The beneficiary is the person or other party designated to receive the proceeds from the life insurance policy following the death of the insured.
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Term Life Insurance FAQs
What is term life insurance and how does it work?
Term insurance is affordable, temporary insurance that provides coverage for a pre-determined period of time (10, 20, 30 years, etc.). It provides you the largest amount of coverage for the dollar when your financial obligations are the greatest. It is pure protection and does not build cash value.
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What are the advantages of purchasing a term life insurance product?
Term life insurance is a very cost-effective way to provide protection for you, your family, or your business. You decide the length of term you want your policy to be in force. These increments can be in 10-, 20- or 30-year durations. This allows you to set aside a premium amount each month to cover a specific need such as mortgage protection.
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What is a Return of Premium Rider?
A Return of Premium Rider (ROP) is available on some term insurance policies. This rider returns the sum of all annual premium paid(including base policy fee and ROP rider premium) at the end of the initial term period, provided the policyowner is still living and the policy remains in force. Premiums for substandard table ratings, flat extras, and all other riders are not included in the return of premium.
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Must my spouse and I both purchase a policy?
No. Columbus Life currently offers the option of adding a term rider to your policy that provides coverage to your spouse.
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Universal Life Insurance FAQs
What is universal life insurance?
A universal life insurance policy is an interest-sensitive, flexible-premium, adjustable life insurance policy. The policy owner selects the amount of insurance (selected amount) and periodic premium (planned premium) for which to be billed. Net premiums paid plus current interest credited are combined to form the policy account value. The cost of insurance, per policy charges, per thousand charges, and other policy and rider charges are deducted monthly from the policy account value.
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What is the key feature of universal life insurance?
The key feature of a universal life insurance policy is flexibility. This flexibility is provided in three ways:
- Premium paid by the policy owner
The amount of money available to fund life insurance changes as we go through different stages of life. Universal life (UL) insurance provides ideal flexibility in that premiums are discretionary as long as the policy maintains a positive cash value. This aspect of UL provides the freedom to alter premium payment patterns as life circumstances change. For example, those just starting out will find UL attractive because they need flexibility in payments as incomes are starting to grow. As time passes and more discretionary income is available, UL allows for additional premium payments, which will produce greater policy value. - Death benefit selected by the policy owner
The policy’s adjustable death benefit also provides desired flexibility. As the policy owner goes through the different stages of life, responsibilities change – causing coverage needs to change. Universal life death benefits may be increased to provide additional protection as the family expands, a new home is purchased, or business opportunities present themselves. Proof of insurability is required in order to increase the selected amount. The selected amount may be decreased upon request of the policy owner as children leave home, the mortgage is paid off, or other events that lessen the amount of insurance coverage needed occur. - Accumulation value built by the policy based upon the premiums paid
The policy owner should always focus on using the premium flexibility to pay more than the amount of the monthly policy charges so that the policy’s cash value will grow. This is particularly true as career advancements generate additional disposable income. Universal life provides an opportunity to accumulate substantial policy value by paying as much premium as desired, subject to guideline premium limitations. This value (if sufficient) can then be used to help provide education funding, to get a leg up on retirement planning, or to provide needed funds in the event of an emergency. (Note that withdrawals and loans will reduce the death benefit.) There must be sufficient cash value in the policy to ensure the policy's no lapse guarantee and extended coverage benefit remain in force.
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What are the two most common available universal life death benefit options?
The two most common death benefit options are:
- Level Death Benefit Option: At least equal to the selected amount of insurance.
- Increasing Death Benefit Option: At least equal to the selected amount of insurance plus the account value.
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How does the universal life account value grow?
The account value accumulates interest daily at at least the guaranteed minimum interest rate. The per thousand expense charge, the monthly per policy expense charge, the current cost of insurance, and other policy and rider charges are deducted on each monthly anniversary day. Partial surrender amounts are deducted when withdrawn.
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What are some of the tax advantages provided by universal life insurance?
Life insurance products like universal life provide significant tax advantages over other wealth accumulation products. Withdrawals up to the amount of premiums paid are not subject to income taxation under income tax law. Secondly, unlike annuities, cash value withdrawn from life insurance (so long as it is not a MEC) is not subject to IRS pre-59 ½ withdrawal penalties. Also, the death benefit from a life insurance policy passes income tax-free to the beneficiary. This is not only a great estate planning tool for the individual but also a great fit for the business market for purposes such as a buy-sell agreements or for key-person coverage.
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Variable Universal Life Insurance FAQs
What is variable universal life insurance?
Variable universal life insurance offers the security and tax advantages of life insurance coupled with the growth potential of equity investing. These life insurance products offer a unique way to preserve your assets from current taxation, transfer them to your beneficiaries, and accumulate additional assets at the same time.
With a variable universal life product, you may allocate your premium to an account with a fixed rate of interest (Fixed Account), or to one or more separate investment accounts (Sub-Accounts). You have the risk of loss, but you also have the opportunity for greater returns than those normally available in a life insurance product.
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How does variable universal life insurance differ from universal life insurance?
Both universal life and variable universal life are flexible premium products. The policy owner determines the amount and frequency of premium payments, subject to guideline premium and the type of death benefit that fits their needs. Whereas with universal life insurance the company invests excess premiums at a standard monthly rate of return on investment, with variable universal life insurance the policy owner selects the investments of excess premiums in a variety of subaccounts within the product.
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How does my variable universal life account value work?
With a variable universal life product, the policy account value component is truly an investment component.Policy owners can determine the sub-accounts into which their net premiums will be invested. They will bear the risk of all losses in these sub-accounts and will also be rewarded with any gains.
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How can I determine my account value?
Our Columbus Life "In Touch" telephone line lets you access your variable universal life account information toll-free at your convenience - day or night, 24 hours a day. Call 1-800-677-9595 and listen to the menu prompts for policy information subaccount values and subaccount unit values, and for fixed account new money rate information.
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Annuity FAQs
What is an annuity and how does it work?
Columbus Life annuities are a tax-deferred method of accumulating money for retirement or other long-term future needs.
Typical annuity features:
- Tax-deferred growth
- Attractive interest rates
- Multiple income options
- Withdrawal privileges
- Money-back guarantee* of the principal, less any withdrawals
How single premium deferred annuities work:
- The annuity owner makes a single payment into the annuity contract. Columbus Life reserves the right to limit the amount.
- The annuity fund grows on a tax-deferred basis.
- The annuity owner can withdraw funds as a guaranteed income, a lump sum, or on a nonsystematic basis.
This hypothetical chart is intended only to illustrate the advantage of compounded long term growth. The earnings do not reflect any applicable taxes or surrender charges.
Important features:
- Tax-Deferred Growth - Annuities allow the owner's funds to grow faster than if they were currently taxed.
- Attractive Interest Rates - The annuity owner earns current interest with a minimum rate guarantee.
- Payment Plans - Many payment plans are available
when the owner wants income to start. These usually include, but are not limited to:
- Payments for a Fixed Period
- Payments for a Fixed Amount
- Lifetime Income
- Joint and Survivor Lifetime Income
- Additional Information
- Surrender Charge - If the contract is terminated, or if a withdrawal is taken, a surrender charge may be applied.
- Withdrawal Privileges - A portion of your account value may be withdrawn without a surrender charge. (There still may be income taxes and an IRS penalty. Check with your tax advisor for advice and information.)
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If I place my money into an annuity, will I be able to easily access it like I can with my checking account?
If you are a person who enjoys "playing" with your money and may have the desire to withdraw the money very quickly, a single premium fixed annuity is not the correct product for you. It is important to keep in mind, though, that the interest you earn on money in a checking account is taxable, whereas the interest you earn on an annuity is not taxed until withdrawn. You can also choose to diversify your money by keeping a certain amount in your checking account, available for immediate withdrawal, and placing the rest in an annuity as a conservative cash accumulation vehicle. A single premium immediate annuity may also be an option.
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What is the difference between an annuity and a Certificate of Deposit (CD)?
A Certificate of Deposit (CD) is an interest-bearing account with rates that you can lock in for a given period of time. An annuity is very similar in that you can guarantee a particular rate for a given period of time, but there are some primary differences. The primary difference is that interest earned on your money with an annuity is tax-deferred, whereas interest earned with a CD is taxable each year. A CD is issued by a bank or financial institution and is guaranteed by the FDIC. An annuity is guaranteed by the issuing insurance company.
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How do I know which annuity is right for me and what the different characteristics are for each product?
Your Columbus Life representative can help you choose the right annuity to help you meet your individual needs and goals.
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