Conditional Contract

The occurrence of a covered loss and the insured's compliance with policy conditions such as timely premium payment — The insurer's promise to pay is conditional — payment is due only if a covered loss occurs while the policy is in force and the insured has satisfied conditions such as paying premiums and submitting a timely claim. If the condition fails (for example, the loss is excluded or the premium was unpaid), no benefit is due. This conditional promise distinguishes insurance from an unconditional obligation to pay.

National insurance concept

Depends on the occurrence of specified conditions, such as timely premium payment and the insured event — A conditional contract is one in which the performance of a promise depends on the occurrence of stated conditions. In life insurance, the insurer's duty to pay the death benefit arises only if the policy is in force, which requires the premiums to be paid when due, and only upon the occurrence of the insured event, generally the death of the insured. If these conditions are not met, the insurer's obligation does not attach. The relevant insured event is the death of the insured person, not the agent, and the claim-filing requirements are governed by the policy and law rather than by a one-week condition.

National insurance concept