General Insurance✓ Verified · outline & fact-checked · Sep 2026Difficulty 1/5
In an insurance contract, the insurer's consideration is:
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
Consideration is the thing of value each party gives. The insured gives the premium; the insurer gives the promise to pay covered losses. That promise, not the premium or the paperwork, is the insurer's consideration. Both sides must provide consideration for the contract to be enforceable, which is why a policy without premium payment support can lapse.
Why the other options are wrong
- B) The premium is the insured's consideration, not the insurer's.
- C) The commission is paid to the agent by the insurer; it is not consideration in the insured-insurer contract.
- D) The application is the offer, not the value exchanged by the insurer.
Memory hook
You pay premium, they promise to pay claims — that is the exchange.