Which of the following statements about consideration in an insurance contract is (are)true?
I.The insured's total consideration is submission of a completed application.
II.The insurer's consideration is the promise to do those things specified in the policy.

Question

Quizplus · Accepted Answer

Consideration in an insurance contract is a mutual exchange of values between the parties. The insured's consideration is the payment of premiums, while the insurer's consideration is the promise to do those things specified in the policy. Option I is incorrect, as the submission of a completed application is only a preliminary step in the formation of a contract, and not a consideration itself. On the other hand, option II correctly identifies the insurer's consideration. Therefore, only option II is true.

Which of the Following Statements About Consideration in an Insurance