Conditional aspect of insurance contracts

An insurance contract is conditional in that the insurer’s promise to pay benefits depends on the occurrence of the risk insured against. If the risk doesn’t materialize, no benefits are paid. Furthermore, the insurer’s obligations under the contract are conditioned on the performance of certain acts by the insured or the beneficiary. For example, the timely payment of premiums is a condition of the continuance of the contract. If premiums are not paid, the company is relieved of its obligation to pay a death benefit — though it would be bound by other promises contained in the contract’s surrender and reinstatement provisions. Providing proof of death — or proof of disability or medical expenses — would be another condition. Until the insurer receives such proof, it is not liable for payment.

The significance of a condition is that if the policyowner or beneficiary satisfies the condition, it legally binds the insurer to its obligations under the contract. If the condition isn’t met, the insurer is released from its obligations. However, conditions upon a policyowner or beneficiary are not legally binding or enforceable. An insured who does not meet a contractual condition simply gives up the right to make a claim under the contract. If a policyowner stops paying premiums, for example, the insurance company cannot compel further payment. It can only cancel the policy. By contrast, an insurance company that does not meet its contractual obligations once the policyowner or beneficiary satisfies the conditions for making a claim may be liable to the insured for damages.

In the Old Covenant, the formal introduction of the covenantal seal — circumcision — begins with an unequivocal injunction addressed to Abraham in Genesis 17. God first recounts his numerous commitments in the covenantal relationship (Genesis 17:6-8). He promises to make Abraham “exceedingly fruitful.” Kings shall come from him. God will establish his covenant as an everlasting covenant, to be a God to this patriarch and to his progeny. He will give Abraham the land of his journeying. God’s promises to Abraham are multifarious.

But God’s promises are not without stipulation. Robinson writes, “‘And you’ (v. 9). Now, emphatically, the Lord of the covenant lays responsibility on his creaturely beneficiary. Earlier, God had commanded that Abraham walk before him in obedience with a life-transforming thoroughness (v. 1). But now he announces with emphasis one specific requirement. Abraham and his seed have no choice in the matter. Divine fiat speaks inescapably: ‘You shall keep my covenant, you and your seed after you.'” (The Christ of the Covenants, p. 148)

We find elsewhere in the Hebrew Scriptures a conditional aspect of God’s covenant, in which he upholds his own, such as, (Psalm 25:10) “All the paths of the LORD are steadfast love and faithfulness, for those who keep his covenant and his testimonies,” and (Daniel 9:4-5) “O Lord, the great and awesome God, who keeps covenant and steadfast love with those who love him and keep his commandments, we have sinned and done wrong and acted wickedly and rebelled, turning aside from your commandments and rules.”

The bilateral quality of God’s covenant — that is, those whom the Lord preserves for himself also will necessarily be true to that covenant by the power of his Spirit — is encapsulated in Apostle Paul’s declaration in the context of faithful persistence, (II Timothy 2:19) “God’s firm foundation stands, bearing this seal: ‘The Lord knows those who are his,’ and, ‘Let everyone who names the name of the Lord depart from iniquity.'”

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Covenant theology