If a gain is to be reported, the difference between total cash received for the base premium plus any certificate loan outstanding and the certificate's cost basis. If the cash exceeds the cost basis, the certificate owner realizes a gain; if the cash plus loans is less than the cost basis, the certificate is surrendered at a loss.

For example, if the cash value is $1,000 and the cost basis is $800, the certificate has a $200 gain.  

Gift tax
A graduated tax assessed to a donor by the federal government and most state governments when assets are gifted from one person to another.  As the gift’s value increases, so does the tax rate.  

Global fund
A mutual fund that invests in stocks or bonds throughout the world, including the United States.  An international fund, on the other hand, invests only outside the United States.  

Government bond
Debt obligations of the U.S. government that are regarded as the highest grade of securities issues.  

Grace period
On a traditional certificate, the period of time following the due date of a required premium during which the certificate remains in force as if the premium had been paid. On a Universal Life certificate, this period begins on the date the accumulated value is insufficient to pay the current monthly deduction. The period is typically one month long on a traditional certificate and 61 days on Universal Life.  

Growth fund
A mutual fund that seeks to provide shareholders with growth of capital by investing in companies with a history of rapidly growing earnings and generally higher price-to-earnings ratios.  Growth funds are more volatile than conservative funds such as income or money markets.  

Growth and Income fund
A mutual fund whose objective is to seek long-term capital appreciation along with income.  

Growth stock
Stock of a company with earnings’ growth at a fairly rapid rate that is anticipated to grow at high levels.  Growth stocks are riskier investments than average stock, however, because they generally have higher price/earnings ratios and make little or no dividend payments to shareholders.