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The concept of "corridor" is most often associated with which of the following policies?

A. Universal life
B. Term life
C. Temporary insurance
D. Modified life

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User Laindir
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8.8k points

1 Answer

2 votes

Final answer:

The 'corridor' concept is linked to Universal life insurance policies. It refers to the necessary gap between the policy's cash value and death benefit to maintain tax advantages.

Step-by-step explanation:

The concept of "corridor" is most closely associated with Universal life insurance policies. The corridor refers to the gap between the cash value and the death benefit in a universal life insurance policy. This is necessary to maintain the policy's status as a life insurance contract for tax purposes. If the cash value comes too close to the death benefit, the excess may be subject to taxation. Therefore, a certain corridor or gap must be maintained to secure the tax advantages of the life insurance policy.

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User Kabaros
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