Which of the following is an example of the insured's consideration?

• A. A paid Premium
• B. A medical examination
• C. A policy application
• D. A signed beneficiary designation

Answer: (A)

Consideration in an insurance contract is the value exchanged between the parties. For the insured, the concrete form of that value is the premium paid to keep the policy in force. A medical exam or the act of submitting a policy application are part of underwriting and the process to obtain coverage, not the ongoing exchange that sustains the contract. A signed beneficiary designation identifies who receives benefits, but it isn’t the value being exchanged. The insurer’s promise to pay covered benefits, in return for the premium, is the fundamental exchange. So the insured’s consideration example is the paid premium.