Question

With respect to the consideration clause which of the following would be considered consideration on the part of the applicant for insurance?
a. notice of policy cancellation.
b. payment of prmium.
c. promise to renew the policy at the end of the policy.
d. providing warranties on the application.

Answer 1

Answer: b. payment of premium.

Explanation:

The Consideration clause is the condition set by the Insurance company for its coverage of a person. In other words, it is what the person is expected to do for the Insurance company to enable it to discharge its responsibilities of being able to cover a client.

In general, this is the payment of premiums along with the statements made by the applicant about themselves in the application to the insurance company.

If premiums continue being paid, the company will cover the person all else equal.