An applicant in Cincinnati signs an A&H application and pays the initial premium. Under the policy's consideration clause, which statement describes the exchange that makes the contract binding?

Why D is correct

A consideration clause recites the mutual exchange that supports the insurance contract: the applicant's consideration is the premium plus the statements in the application, and the insurer's consideration is its promise to pay the policy's benefits. Both sides give value, which is what binds the agreement under the Ohio Revised Code framework, and the Ohio Department of Insurance treats this mutual exchange as a core concept of A&H policy structure. Neither the premium alone nor the insurer's promise alone constitutes the whole consideration.

Why the other options are wrong

• A) The insurer's promise is real consideration, but the applicant's premium and application statements are consideration too; the exchange is mutual.
• B) The premium is only half of the applicant's side; the application statements are also part of the insured's consideration.
• C) Consideration exists from the moment the premium is paid and the application is signed; no claim is needed to make the contract binding.

Memory hook

Two-sided bargain: premium and statements for a promise.