General Insurance✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
In an insurance contract, the insured's consideration consists of:
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
Consideration is the bargained-for exchange that makes a contract enforceable. The insured's consideration is the premium paid plus the promises and statements made in the application, while the insurer's consideration is its promise to pay covered benefits. A guarantee of continued good health is impossible to perform, property transfer is not part of a health contract, and the face amount is the insurer's obligation rather than anything the insured gives.
Why the other options are wrong
- A) No one can guarantee continued good health; such a promise is impossible and is not the consideration.
- B) The insured does not transfer property to the insurer in a health or disability policy.
- C) The face amount is what the insurer promises to pay, which is the insurer's consideration, not the insured's.
Memory hook
Premium flows in, and the insurer's promise to pay flows out.