1. Summer has a universal life (UL) insurance policy with a face value of $300,000. The policy has a cash surrender value (CSV) of $30,000 and offers a level death benefit plus account value. Summer's policy is based on her own life, with her husband Michael as revocable beneficiary. The adjusted cost base (ACB) of Summer's policy is $27,000. Which of the following statement's about Summer's UL is CORRECT?

A. If Summer dies, Michael will receive $330,000, $300,000 of which is tax-free

B. If Summer dies, Michael will receive $330,000, $327,000 of which is tax-free

C. If Summer surrenders the policy, she will have a taxable capital gain of $3,000

D. If Summer surrenders the policy, she will have a taxable capital gain of $30,000

2. Jebran is an insurance agent and he meets with his client, Sheena. Jebran informs Sheena that her application for insurance has been declined by the insurance company because there is no insurable interest. When Sheena asks Jebran to explain what this means, which of the following would CORRECTLY explain why there is no insurable interest?

A. Sheena would be in a position to profit from the death of the life insured.

B. Sheena does not have the financial means to afford the policy premiums.

C. Sheena is expected to fail to make a financial gain if the life insured dies.

D. Sheena is not expected to suffer a financial loss if the life insured dies.