Articles Posted in Life Insurance

Fort Worth life insurance attorneys should know this – but here goes with a reminder.

The most common life insurance types are term, whole life, and universal life.

“Term” life insurance policies simply provide a death benefit in return for a premium payment. At the end of the policy year, or “term,” the insurance ends, and the policy has no value. Most of these are for 10 or 20 years. Because the insured person is only paying for the death benefit, term policies are cheaper in the early years. As the insured person gets older, the risk of death increases and so does the premium, so term policies may become more expensive that the other types of life insurance. Insurance companies typically sell term policies that promise a fixed premium for a set number of years as stated above. This means an insurance company that sells a term policy for a fixed period, such as 10 years, will not be allowed to increase the premiums during that 10 year period.

Fort Worth life insurance attorneys and those in Dallas and Weatherford need to know what the requirements are in a policy.

Texas Insurance Code, Section 1101.002(a), tells us life insurance policies must contain several prescribed provisions. These required provisions according to the Texas Insurance Code, generally include:

(a) Section 1101.003 says a life insurance policy must provide that the policy or the policy and the application for the policy constitute the entire contract between the parties;

Grand Prairie lawyers need to understand the legal purpose for insurance so that they can better advise clients about their cases.

The purpose for insurance is to compensate for a loss. It is not a way of gambling. The United States Supreme Court said in 1866, that an insurable interest is necessary for the following reasons:

To prevent gambling To reduce intentional loss To enforce the principle of equity Bringing this topic closer to the present a 1998, Tyler Court of Appeals case is worth knowing. It is styled, Stillwagoner v. Travelers Ins. Co.

Fort Worth life insurance lawyers may already know some of this – but just in case, here goes.

Life insurance pays a stated amount of benefits to the beneficiary upon the insured person’s death. The beneficiary is usually relatives but can be business partners and creditors. Usually, the policy has a “face amount value”. This would be the value paid by the insurance company upon the death of the insured. There are policies wherein the face amount is a starting point from which the amount stated is increased. An example would be a policy that pays a “double indemnity” for accidental deaths. This means that whatever the fact amount of the policy reads, such as $100,000, then that face amount doubles to $200,000 if death occurs as the result of an accident.

“Term” insurance policies pay a fixed amount stated in the policy if death occurs during the term of the policy. This is usually a stated time of 10 or 20 years.

Dallas insurance lawyers need to be able to understand and explain what an “insurable interest” is when asked.

A 1972, Amarillo Court of Appeals case helps explain an insurable interest. The style of the case is, North River Ins. Co. v. Fisher.

Here is some information to know:

Fort Worth life insurance attorneys need to know about this case. It is an opinion issued by the U.S. 5th Circuit Court of Appeals in 2005. It is styled, Monumental Life Insurance Company v. Hayes Jenkins.

Here are some facts:

In November 2000, the insureds, husband and wife, purchased a house executing a mortgage note and an escrow agreement with the lender. Two months later the lender, by agreement with the insurer, mailed an unsolicited application for a mortgage life insurance policy underwritten by the insurer. All the enclosed materials promised a payoff of the mortgage balance up to $300,000 in the event of one of the insured’s death and emphasized a “no risk” 30 day trial period. The insureds promptly completed and mailed the application. The husband died four days after the policy became effective, but before the mortgage company issued the first month’s premium payment and the wife demanded that the proceeds of the mortgage life policy be applied to liquidate the remaining loan balance pursuant to the terms of the policy. The insurer refused and filed a declaratory judgment action seeking a ruling that at the time of the husband’s death the policy was not in force for failure by the insureds to pay the required premium. The wife counterclaimed against the insurer for breach of contract and violations of the Texas Insurance Code and DTPA. She also filed a third party complaint against the mortgage lender asserting claims for breach of the escrow agreement, negligence, and violations of the DTPA and Insurance Code. The district court granted the insurer and the lender’s motions for summary judgment, dismissing all of the wife’s counterclaims and third party claims and this appeal followed.

Dallas life insurance attorneys need to read and know this case. It is an opinion issued by the Texas Supreme Court in 1990. The style of the case is Koral Industries v. Security Connecticut Life Insurance Co.

Here are some of the facts:

Koral Industries sought a new life insurance policy for one of its key employees, Lewis Lindsey, in 1984. Lindsey did not disclose damaging medical history regarding treatment over the five years prior to his application, a history which included hospitalization in 1981, 1982, and 1983, and counseling and treatment for depression and excessive use of alcohol. A medical information agency had reported treatment for mental or nervous disorders from 1976-78, and Lindsey’s physician reported treatment for anxiety.

Dallas life insurance lawyers need to know this case. The case is styled Lilly Sharp v. Lincoln American Life Insurance Company. The opinion was issued by the Corpus Christi Court of Appeals in 1988.

This lawsuit was filed by Lilly Sharp after the death of her daughter.

Lincoln had denied the claim based on misrepresentations by the insured in the policy application. The trial judge ruled in favor of Lincoln and this appealed followed.

Fort Worth life insurance attorneys need to know this case. The case is styled Republic-Vanguard Life Insurance Company v. Beth Walters. It is a 1987, opinion from the 1st District Court of Appeals. Here is some background.

In 1981, the deceased, James Walters, applied to Republic for mortgage protection insurance. On his application, he stated he knew of no impairment to his health. Republic requested an examination by a registered nurse. He told her of various ailments, and that he had gained 50 pounds in the previous year “due to beer drinking,” that he had been wounded in Viet Nam.

When the nurse asked about impaired sight or hearing, mental illness, cancer, growth, rupture or syphilis, James said no. James provided names of his doctors and the hospital he had been in.