Which is one of the three elements of an insurance contract?

• A. Bilateral
• B. Unilateral
• C. Conditional
• D. Enforceable

Answer: (C)

Insurance contracts are conditional agreements. The insurer’s promise to pay benefits doesn’t take effect automatically; it depends on certain conditions being met. In health or accident coverage, those conditions typically include paying the premium, providing truthful and complete information on the application, and the occurrence of a covered loss with proper notice and proof of loss. If any of these conditions aren’t satisfied, the insurer may deny or void the claim. This conditional nature—payment of benefits only after the specified events and requirements occur—is what makes the contract described as conditional. The other terms aren’t as central to how insurance contracts operate: the idea of bilateral versus unilateral is more about promises in a contract generally, and enforceability is a property common to most contracts, but the defining feature highlighted here is the dependence on conditions.