General Insurance✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
A health insurance policy is considered a unilateral contract because:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
In a unilateral contract, only one party makes an enforceable promise. The insurer promises to pay covered losses; the insured does not promise to stay healthy or to file claims — the insured merely performs a condition (paying premium) to keep the promise alive. This one-sided promise structure distinguishes insurance from bilateral contracts where both sides exchange enforceable promises.
Why the other options are wrong
- B) The insured's premium payment is a condition, not a contractual promise to act.
- C) No policy requires a promise of future health; that would be impossible to guarantee.
- D) Unilateral refers to who promises, not to the insurer's power to modify terms.
Memory hook
One promise, two players: the insurer promises, the insured performs.