General Insurance✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
Insurance is a conditional contract because the insurer's obligation to pay benefits is conditioned on:
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
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.
Why the other options are wrong
- A) Renewal is a separate process; the conditional obligation applies to the in-force policy itself.
- B) No court judgment is needed to trigger payment; the policy's own terms define the conditions.
- D) Surrendering the policy is a way to end coverage (cash surrender), not a condition to receive a death benefit.
Memory hook
Conditional = pay if the loss is covered and the house is in order. Miss a condition, miss the benefit.