In a unilateral contract, who makes a legally binding promise to pay benefits if an insured loss occurs?

In a unilateral contract, the insurance company makes a legally binding promise to pay benefits if an insured loss occurs. This is a defining feature of unilateral contracts, which are agreements where only one party makes a binding promise. In the context of life insurance, the insurer promises to pay a specified benefit to the policyholder or beneficiary upon the occurrence of a covered event, such as the death of the insured.

The insured, policyholder, and beneficiary have roles within the contract but do not make binding promises to pay benefits. The insured is the individual whose life is covered by the policy, the policyholder is often the person who owns the policy (which might or might not be the insured), and the beneficiary is the person designated to receive the policy benefits upon the insured's death. However, these parties do not have the same contractual obligations as the insurance company, which is the sole entity providing the guarantee of payment under the contract.