The essential element of an insurance contract that specifies that the insurer exchange a promise, in return for the premiums paid by the insured, is known as:
A. Conditional.
B. Consideration.
C. Commission.
D. Coinsurance.
A. Conditional.A contract in which one party provides something of value to another party in exchange for a conditional promise, which is a promise that the other party will perform a stated act upon the occurrence of an uncertain event. [ Insurance contracts are aleatory because the policyowner pays premiums to the insurer, and in return the insurer promises to pay benefits if the event insured against occurs. Contrast with commutative contract. ]
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Asked 11/14/2011 12:45:44 PM
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