Life and health insurance policies are classified as:

Life and health insurance policies are classified as unilateral contracts because, in these contracts, only one party—the insurer—makes a legally enforceable promise. When a policyholder pays premiums, they are not promising to retain the policy or to fulfill any obligation; rather, they are simply providing payment for coverage.

In a unilateral contract, the insurance company is obligated to pay a benefit upon the occurrence of a covered event, such as the death of the insured in a life insurance policy or the incurring of medical expenses in a health insurance policy. The insured, however, does not have any reciprocal obligation to the insurer beyond fulfilling the premium payments, thereby demonstrating the one-sided nature of the agreement.

This characteristic differentiates unilateral contracts from bilateral contracts, where both parties have mutual obligations. Void contracts are invalid from the start and cannot be enforced by either party, while implied contracts are formed by the actions and circumstances rather than explicit words. Thus, the classification as a unilateral contract accurately reflects the nature of life and health insurance policies within the broader spectrum of contract law.