General Insurance✓ Verified · outline & fact-checked · Sep 2026Difficulty 1/5
In an accident and health insurance contract, the insured's consideration is the premium payment, and the insurer's consideration is:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Consideration is the bargained-for exchange that makes a contract enforceable. The insured gives the premium (or the promise to pay it); the insurer gives its promise to pay benefits for covered losses. Both sides provide value, which is why the contract is binding. The insurer does not guarantee that losses will not happen or that premiums will return.
Why the other options are wrong
- B) No insurer can guarantee that no loss will occur; coverage addresses the possibility of loss.
- C) Refunding premiums for good health is not the insurer's consideration under a standard policy.
- D) Insurers retain the right to investigate claims; nothing in the exchange surrenders that right.
Memory hook
Premium in, promise of benefits out. That exchange is the consideration.