General Insurance✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
A policy is drafted entirely by the insurer, the insured's duty to keep paying premiums is a condition rather than a promise, and the insurer pays only if covered conditions are met. Which set of characteristics correctly describes this contract?
Select an option to reveal the answer and the full 3-part explanation — free, no signup.
Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
The policy is a contract of adhesion because the insurer drafts it on a take-it-or-leave-it basis. It is unilateral because only the insurer makes a legally enforceable promise — the insured's premium obligation operates as a condition. It is conditional because the insurer's duty to pay arises only when conditions (premium paid, covered loss, timely notice) are met. These three characteristics together describe nearly every insurance policy, and identifying them from a scenario is a core contract-law skill.
Why the other options are wrong
- B) Aleatory describes unequal exchanged values, and 'commutative' is the opposite of aleatory; neither set fits the scenario, which concerns drafting, promises, and conditions.
- C) The policy is not negotiated (it is adhesion), not bilateral (only the insurer promises), and not unconditional (coverage depends on conditions).
- D) The contract is unilateral, not bilateral; both parties do not make enforceable promises of performance.
Memory hook
Take-it-or-leave-it (adhesion), one promisor (unilateral), and 'if you comply' (conditional).