In a unilateral insurance contract, who promises to pay benefits?

• A. The insured promises to pay benefits.
• B. The insurer promises to pay benefits.
• C. The premium is never paid.
• D. The beneficiary promises to pay premiums.

Answer: (B)

In a unilateral contract, only one party makes a binding promise. Here, the insurer promises to pay benefits if a covered event occurs, which is the promise that creates the insured’s protection. The insured’s obligation is to pay the premium to keep the policy in force, not to promise future benefits. So the commitment to pay benefits comes from the insurer.

The other statements don’t fit because the insured does not promise to pay benefits, and premiums are not never paid—they must be paid to maintain coverage. The beneficiary isn’t the one who promises to pay premiums either; they are the recipient of benefits, not the payer.