General Insurance✓ Verified · outline & fact-checked · Sep 2026Difficulty 1/5
Which of the following is NOT a characteristic of an insurance contract?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
An insurance contract is unilateral, not bilateral: only the insurer makes a legally enforceable promise (to pay covered benefits), while the insured's premium payment is a condition rather than an enforceable promise. Insurance contracts are also aleatory (values exchanged depend on chance), conditional (payment depends on conditions such as notice and proof of loss), adhesion (drafted by the insurer), and personal (tied to a particular insured). A bilateral contract — with equal, mutually enforceable promises — does not describe insurance.
Why the other options are wrong
- B) Adhesion is a genuine characteristic: standardized policy language is drafted by the insurer and offered on a take-it-or-leave-it basis.
- C) Unilateral is the accurate description; the insurer's promise is enforceable while the insured's premium obligation is a condition.
- D) Conditional is accurate; benefits are paid only when conditions such as a covered loss, notice, and proof of loss are met.
Memory hook
Insurance is unilateral, adhesive, conditional, aleatory, personal — never bilateral.