General Insurance✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
A health insurance policy is conditional because the insurer's duty to pay benefits arises only if:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Insurance policies are conditional contracts: the insurer's promise to pay is conditioned on the insured's performance of stated duties — paying premiums when due, giving timely notice of a loss or claim, cooperating with the insurer, and providing proof of loss. If a condition is not satisfied, the insurer's duty to pay does not arise. This is a defining characteristic that distinguishes insurance from a simple debt.
Why the other options are wrong
- B) The insurer may not demand arbitrary payments; benefits are governed by the policy's terms and conditions.
- C) Agent approval is not a policy condition; the insurer evaluates claims under the policy's own requirements.
- D) Monthly renewal is a billing feature, not the condition precedent that triggers the insurer's duty to pay.
Memory hook
Conditional = the insurer pays only if you do your part. Pay the premium, give notice, prove the loss.