Definition - What does Aleatory Contract mean?
Aleatory contracts are contracts in which there is no obligation for one party to pay another party until a specific event takes place.
Insuranceopedia explains Aleatory Contract
Since insurers don't usually have to pay policyholders until they file a claim, most insurance contracts are aleatory contracts.
Because most insurance contracts are aleatory contracts, it is always possible that an insurer may never have to pay policyholders any money whatsoever. For example, if a person buys a health insurance policy and then never visits the doctor or gets injured during the policy period, the insurer may collect premiums and never pay the insured without violating the contract.
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