What is a characteristic of the structure of an insurance policy?

A fundamental characteristic of an insurance policy is that it often includes definitions to provide clarity. This is essential because insurance terminology can be technical and specific, leading to potential misunderstandings if not clearly defined. Definitions help policyholders understand the key terms used throughout the document, ensuring all parties involved have a common understanding of what is being covered, the responsibilities of each party, and the terms of the agreement.

In relation to the other options, while exclusions may often be found towards the end of a policy, this is not a definitive or universal rule applicable to all policies. Conditions apply to both the insurer and the policyholder, dictating the actions required to maintain coverage or address claims. Additionally, endorsements can indeed alter coverage by adding or modifying terms, which is contrary to the assertion made in the last option. Thus, the inclusion of definitions is a critical structural component that enhances the overall clarity and effectiveness of an insurance policy.