[C138a]

consideration

In legal terms, it is the inducement to a contract or the promises made. It may be either express or implied. The insurance policy is a common example. The consideration provided by the insured is the premium dollar, and the consideration of the insurer is a promise to pay should loss, accident or injury occur. If a loss does not occur, nothing is paid by the insurer. Should there be a loss, however, the amount of coverage provided by the insurer may exceed the lifetime accumulation of premiums paid by the insured.