Which term describes the insurance company's obligations to pay claims?

The correct term for describing the insurance company's obligations to pay claims is liability. In the context of insurance, liability refers to the legal responsibility of the insurance company to cover certain risks and pay claims arising from those risks as outlined in the insurance policy. This obligation is a fundamental aspect of the insurance contract, ensuring that policyholders can rely on the insurer to fulfill their financial commitments in the event of a covered loss.

Coverage pertains to the specific protections provided by the insurance policy, detailing what losses or damages are included under the policy's terms but does not directly refer to the company's obligation to pay. Underwriting is the process by which an insurer evaluates the risk of insuring a person or asset and determines appropriate premiums. Beneficiaries are individuals or entities designated to receive benefits from a life insurance policy but do not define the insurer's obligations to pay claims. Therefore, liability is the most accurate term in this context.