General Insurance PrinciplesQuestion 607 of 716
Insurance is called a unilateral contract because:
a.Both parties make legally enforceable promises
b.Neither party is legally bound to anything at all once the policy has actually been delivered to the owner
c.The insured is legally required to keep paying premiums
d.Only the insurer makes a legally enforceable promise once the premium is paid
Explanation
In a unilateral contract only one party, the insurer, makes an enforceable promise; the insured is not legally compelled to continue paying. Mutual enforceable promises would make it bilateral.
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Related questions on this topic
- In a replacement transaction, the producer generally must:
- The principle of utmost good faith in insurance means that:
- Describing insurance as an aleatory contract means that:
- Insurance is a conditional contract, meaning that:
- Apparent authority is the authority an agent appears to have because:
- Implied authority of a producer is:
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PrepPass team · Verified against California Life & Health Insurance License Exam · How we review
Reviewed by John Zihao Zhang — California-Licensed Life Insurance Agent (CA Dept. of Insurance License #4396095 — verify)