Types of Insurance Contract

Purchasing an insurance, you cannot just neglect the simple thing but crucial thing related with insurance , that is insurance contract. Many people have known or heard a lot about insurance but actually do not know what the definition of insurance contract is. Yes, people do not really understand what the definition of insurancce contract as they only focus on just the insurance. Insurance contract is actually used as a base for insurance claim in the future time on the things being insured. 

Clearer explanation is that the insurance contract is a statement on the savings related with the insurance policy and the obligation and also rights of both the insurer and insurance company. As cited from eHow, these obligations include paying for automobile repairs, health care costs and even financial obligations after an insured passes away. 

Further on what the definition of insurance contract, there is actually uncertainty in most of insurance contracts regarding to when the contract will be pay.  Even though, what the definition of insurance contract is clearly understood, but there is still chance of benefits loss from the contracts, before the contract is paid. In any case, this uncertainty factor is what is required in all insurance contracts for the policies to be considered insurance. This is called an aleatory contract (eHow). Therefore, insurance is also considered as conditional for the previously mentioned condition, aleatory insurance contract. This is one of the types of insurance contracts. In case the condition does not happen, then there will be no payment made.
Another type of insurance contract is what so called as contract of adhesion.  This type of insurance contract does not involve negotiation between two parties but provided by one party and applied when the other party signs and agrees it. It means that the draft of the contract is prepared by one party and the other one will only needs to agree it by signing it. Therefore, the party who does not draft the contract must carefully read and understand the policies in order to avoid dispute in the future time.

Another type of insurance contract is unilateral contract. In this type of insurance contract the enforceable promise is only made by the insurance company while the insured can choose whether to pay the premiums or not. The insurance company cannot bind the insured to the policy, but the insured can bind the insurance company, requiring the company to pay the promised benefits (eHow).