New York State Life Insurance Exam Questions Practice Question
Under a Universal Life insurance policy, a corridor represents the
Correct Answer: A
Rationale: In a Universal Life insurance policy, the corridor refers to the gap between the total death benefit and the policy's cash value, ensuring that the death benefit remains higher than the cash value for tax purposes. This design helps maintain the policy's tax-exempt status.
Option B incorrectly describes the conversion period for group policies, which is unrelated to Universal Life insurance. Option C refers to the reinstatement period of a lapsed policy, not its structure. Option D discusses benefit distribution, which does not pertain to the corridor concept in Universal Life policies.
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