'insurance policy' vs 'insurance agreement'

[Jurak]

Business English Lesson, Advanced Level

ESL/EFL Test #129 "Insurance Policy Vocabulary", question 1

I took out a life insurance ......... with State Ranch Insurance Company last week.

(a) contract
(b) policy
(c) agreement
(d) deal

Business English Lesson, Advanced Level

ESL/EFL Test #129 "Insurance Policy Vocabulary", answer 1

I took out a life insurance policy with State Ranch Insurance Company last week.

Correct answer: (b) policy
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HEY I WOULD LIKE EXPLANATIONS ABOUT THE ANSWERS..

THANKS
Jurak

[Mister Micawber]

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'Policy' is the correct word for a contractual agreement between a policyholder and an insurance company.
.
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Native English teacher at Mister Micawber's