Final answer:
In an insurance contract, the insured, insurer, and agent must adhere to the terms of the contract. Commissions, referring to a payment structure or regulatory body, are not parties to the contract and hence are not bound by its promises. so, option 4 is the correct answer.
Step-by-step explanation:
In the context of an insurance contract, all parties involved must adhere to the promises made within the contract, with the exception of entities that do not have a contractual obligation. Among the given options, the insured, the insurer, and the agent are all bound by the terms of the insurance contract. However, the commission, which likely refers to the payment structure or regulatory body, does not have an obligation to the promises made in the contract itself.
Insurance is a method of protecting a person from financial loss, with the insured making regular premium payments to the insurance entity. In return, the insurer provides compensation for significant financial damages from events covered by the policy. An agent may act on behalf of the insurance entity but is not the entity entering into the contract itself. Meanwhile, the commission is generally not a party to the insurance contract, and thus, is not required to abide by its terms.