Which two types of contracts are characteristically related to insurance?

The two types of contracts that are characteristically related to insurance are personal and conditional contracts.

Insurance contracts are primarily personal because they involve a specific individual or entity rather than being transferable to someone else. The insurer underwrites based on various personal factors—such as the insured’s health, lifestyle, and risk profile—indicating that the agreement creates rights and obligations specific to the insured person or entity.

Additionally, insurance contracts are conditional in nature. This means that their effectiveness depends on specific conditions being met. For instance, benefits are payable only upon the occurrence of certain events, such as a loss or a claim. The conditions laid out in the insurance policy dictate when and how the insurer is obligated to pay out benefits, emphasizing that the coverage depends on particular circumstances, such as the policyholder fulfilling their duties and the occurrence of a covered risk.

Together, these characteristics define the nature of insurance contracts, making "personal and conditional" the correct choice.