insurance policy

An Insurance contract determines the legal framework under which the features of an insurance policy are enforced. Insurance contracts are designed to meet very specific needs and thus have many features not found in many other types of contracts. Many features are similar across a wide variety of different types of insurance policies.

General Features

The insurance contract is a contract whereby the insurer will pay the insured (the person whom benefits would be paid to, or on the behalf of), if certain defined events occur. Subject to the 'fortuity principle', the event must be uncertain. Buying a crop insurance policy is one risk management option. The uncertainty can be either as to when the event will happen (i. e. in a life insurance policy, the time of the insured's death is uncertain) or as to if it will happen at all (i. e. a fire insurance policy). Insurance contract - Wikipedia, the free encyclopedia.