General Insurance PrinciplesQuestion 608 of 716
Insurance is a conditional contract, meaning that:
a.No conditions of any kind apply to the coverage
b.The insurer must pay benefits regardless of any conditions
c.The insured alone sets all of the conditions under which the insurer will be obligated to pay a future claim
d.Benefits are never paid unless conditions, such as paying premiums and filing proof of loss, are met
Explanation
A conditional contract pays benefits only when specified conditions are satisfied, like premium payment and submitting proof of loss. The insurer's duty is not unconditional, and the conditions are set in the contract, not by the insured alone.
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Related questions on this topic
- The principle of utmost good faith in insurance means that:
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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)