Which characteristic indicates that the insurer has an obligation to cover losses while the insured can terminate the payment of premiums anytime?

The characteristic that indicates the insurer has an obligation to cover losses while the insured can terminate the payment of premiums at any time is described as unilateral. In a unilateral contract, one party (the insurer) is bound to perform under the terms of the agreement—specifically, covering losses—while the other party (the insured) has the option to stop fulfilling their part of the contract, such as paying premiums. This creates an imbalance where the insurer is obligated to act regardless of the insured’s commitment, which signifies the unilateral nature of the insurance contract.

The other characteristics do not depict this scenario accurately. Conditional contracts involve obligations that depend on certain conditions being met; aleatory contracts entail unequal exchange, meaning the amount paid by either party may not match the compensation received; and mutual contracts suggest shared obligations between both parties. None of these concepts capture the essence of the insurer's obligation and the insured's flexibility to discontinue premium payments as effectively as unilateral does.