Tennessee Life Producer Practice Exam

Who makes the enforceable promises in a unilateral insurance policy?

1. The policyholder

2. The insurance agent

3. The insurance company

4. The beneficiary

The correct answer is: The insurance company

In a unilateral insurance policy, the enforceable promises are made exclusively by the insurance company. This means that the insurer is the only party that commits to perform certain actions, such as paying out claims or providing benefits if stipulated conditions are met. The policyholder, while they pay premiums and can make requests or file claims, does not make enforceable promises to the insurer; their obligations are typically in the realm of paying premiums and adhering to policy conditions. In this context, other parties like the insurance agent and the beneficiary do not make enforceable promises in the contract between the insurance company and the policyholder. The insurance agent acts as a representative of the company but does not hold any responsibility for the contractual promises laid out in the policy itself. Meanwhile, the beneficiary is simply designated to receive benefits from the policy but is not privy to the enforceability aspect of the promises made. Thus, the correct reminder is that in a unilateral insurance policy, the enforceable promises rest solely with the insurance company.