General Insurance✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
A disability policy requires the insured to pay premiums when due, give timely notice of claim, and submit proof of loss. Because the insurer's duty to pay depends on these steps, the policy is described as:
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
An insurance policy is a conditional contract: the insurer's obligation to pay is conditioned on the insured's performance of specified requirements - paying premiums, giving notice of claim, and submitting proof of loss. If a condition is not met, the insurer may not be obligated to perform. This is distinct from an aleatory contract (unequal values exchanged on a chance event), a personal contract (attached to a specific person), and adhesion (drafted by one party).
Why the other options are wrong
- B) Aleatory refers to the unequal exchange of values dependent on a chance event, not to performance conditions.
- C) A personal contract is one that attaches to the individual insured rather than running with property.
- D) Adhesion describes the take-it-or-leave-it drafting of the policy.
Memory hook
Pay, report, prove - do the conditions and the insurer performs. Conditional contract.