Question

question 9 of 15
an insured pays a $100 premium every month for his insurance coverage, yet the insurer promises to pay $10,000 for a covered loss. what characteristic of an insurance contract does this describe?
a. good health
b. conditional
c. aleatory
d. adhesion

Explanation:

An aleatory insurance contract features unequal exchanges of value between parties: the insured pays small, regular premiums, while the insurer only pays a large sum if a specific uncertain event (covered loss) occurs. This matches the scenario where a $100 monthly premium is exchanged for a potential $10,000 payout. The other options are incorrect: "Good health" is not a contract characteristic; "Conditional" refers to requirements to trigger coverage, not unequal value exchange; "Adhesion" means the insured has no input on contract terms.

Answer:

C. Aleatory