The insuring agreement is defined as the insurer's basic promise.

• A. True
• B. False
• C. Only in permanent policies
• D. It depends on rider

Answer: (A)

The insuring agreement is the insurer’s basic promise to pay covered benefits in exchange for the premium. It states who is insured, what events or losses are covered, the amount of coverage, and the general terms of payment. This promise is the foundation of the contract; other sections like exclusions, definitions, and riders modify or limit it but do not replace the core promise. Therefore, the statement is true: the insuring agreement represents the insurer’s basic promise. It isn’t limited to permanent policies, nor does it depend on a rider—the rider simply adds or adjusts coverage to the existing promise.