General Insurance✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
An insurance contract is said to be aleatory because:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Aleatory means the contract is conditioned on the occurrence of an uncertain event, so the values exchanged are unequal: the insured pays a relatively small premium while the insurer may pay a far larger claim, or nothing at all. This distinguishes insurance from commutative contracts, in which both sides exchange roughly equal value.
Why the other options are wrong
- B) Simultaneous performance describes a commutative contract, not an insurance policy, whose performance depends on a future uncertain event.
- C) The take-it-or-leave-it nature of the policy describes an adhesion contract — a separate characteristic.
- D) One-sided acceptance language describes adhesion as well; aleatory is about unequal exchange of value.
Memory hook
Aleatory = a bet with uneven stakes: you pay a few dollars, the insurer may owe a fortune. Unequal exchange, by design.