Conditional contracts require specific events to occur for what purpose?

Conditional contracts in the realm of insurance are agreements where specific conditions must be met for the contract to be enforced or for benefits to be paid out. In the context of life insurance, these conditions often involve events that determine whether a policyholder or their beneficiaries are eligible to make a claim.

When an insured event occurs—such as the death of the policyholder or a designated event specified in the contract—the insurer is then obligated to pay out the benefits if all stipulated conditions have been fulfilled. This means that the eligibility for claims is intrinsically linked to whether these conditions have been satisfied, making it a fundamental practice in the contractual obligations of insurance.

This contrasts with other choices such as preventing fraud, changing policy terms, or issuing new policies. While those aspects are significant in the broader context of insurance practices, they do not directly explain the role of conditional contracts in determining when claims can be made. Thus, focusing on the eligibility aspect highlights the essential nature of conditional contracts in the claims process.