Question

The terms of an insurance policy must be accepted or rejected as presented; they are not open to negotiation. Which term describes this characteristic of insurance policies?

a) An insurance contract is a contract of adhesion.
b) This means it is drafted by the insurer and offered to the prospective policyowner on a take-it-or-leave-it basis.

Answer 1

An insurance contract of adhesion is the term that describes the characteristic of insurance policies where the terms must be accepted or rejected as presented, without the ability to negotiate. Hence the correct answer is option A

Step-by-step explanation:

The characteristic of insurance policies where the terms must be accepted or rejected as presented, without the ability to negotiate, is called an insurance contract of adhesion. In this type of contract, the insurance company drafts the policy and offers it to the prospective policyowner on a take-it-or-leave-it basis.

Hence the correct answer is option A