Articles Posted in Life Insurance

Most people living in Arlington, Grand Prairie, Dallas, Fort Worth, Mansfield, Irving, DeSoto, Cleburne, Weatherford, and all the other places in Texas, will have some form of life insurance on their lives. It may be a policy from work, or a policy thru their bank, or a policy they have purchased through their insurance agent. The question becomes; Who can you take a life insurance policy out on and who can be named as a beneficiary in the policy? When a spouse is the person who is insured or the person who is the beneficiary under the life insurance policy there is not usually a problem. But what if it is someone else?

An insurable interest is what is required. Or an expectation of a pecuniary benefit. So, who has an insurable interest or an expectation of a pecuniary benefit?

The Texas Supreme Court in 1942, in the case, Drane v. Jefferson Standard Life Insurance Company, stated; “A person that has a reasonable expectation of pecuniary benefit or advantage from the insured’s continued life has an insurable interest.”

People living in Grand Prairie, Dallas, Fort Worth, Arlington, Carrollton, Burleson, Aledo, or anywhere else in Texas who have life insurance are usually going to have a place in the life insurance policy where they name a beneficiary. Things will happen after naming the beneficiary to make the insured want to change the beneficiary.

The person named as a beneficiary in a life insurance policy is the person who receives the benefits of the policy upon the death of the person insured by the policy. The named beneficiary is often times a spouse of the named insured or the children of the named insured. Other times it is a creditor or an estate. Sometimes it is a business partner.

It is well settled law that a life insurance beneficiary must have an insurable interest in the insured’s life. This was stated as early as 1894 by the Texas Supreme Court in the case, Cheeves v. Anders. It was restated in 1998 by the Houston Court of Appeals [14th Dist.] in Tamez v. Certain Underwriters at Lloyd’s, London International Acc. Facilities, and again in 1998 by the Tyler Court of Appeals in Stillwagoner v. Travelers Insurance Co.

An insured in Grand Prairie, Dallas, Fort Worth, Coppell, Richardson, Duncanville, Aledo, Arlington, or anywhere else in Texas may ask this question: When does the life insurance policy become effective? Here is some guidance.

Most life insurance policies expressly state the “effective date” of coverage. This date may be earlier than, or later than, the date the first premium is paid or the dates the policy is issued or delivered. Often, an insurance policy may have an effective date, an issue date, and a policy date — and they may all be different, causing confusion or misunderstanding. If the dates differ, disputes may arise over when the policy actually took effect or terminated. The effective date can be important in setting the due date for subsequent premiums and thus the date of any lapse for failure to pay a premium.

An example to think about is found in the case, Life Insurance Company of the Southwest v. Overstreet. This is a Texas Supreme Court case decided in 1980. Here is a brief summary of the case:

What are clauses that are illegal / prohibited? Someone from Grand Prairie, Arlington, Mansfield, Burleson, Crowley, Lake Worth, or other places in Texas may ask that question. Here are a few examples of clauses / provisions that are illegal in Texas when they are included in a life insurance policy.

The following provisions cannot be included in life insurance policies:

1. Per Texas Insurance Code, Section 1101.053, a policy cannot limit the time to sue to less than two years. Section 1101.053 reads: “A life insurance policy may not include a provision that limits the time during which an action under the policy may be commenced to a period of less than two years after the date the cause of action accrues.”

No matter if you live in Dallas, Fort Worth, Mesquite, Garland, Duncanville, De Soto, Hurst, Bedford, Aledo, or anywhere else in Texas, any insurance policy you purchase must have certain provisions in it. The following are some of those provisions.

The Texas Insurance Code, Sections 1701.002 thru 1701.151, says life insurance issued in the State of Texas must be approved by the Texas Department of Insurance. Policies must contain these provisions:

1) Benefits shall be payable in currency. See Texas Insurance Code, Section 1102.002. The Texas Department of Insurance can withdraw approval of policies that offer payment in foreign currency that is less stable than United States curerency.

People in Grand Prairie, Arlington, Dallas, Fort Worth, Weatherford, Irving, Carrollton, and other places in Texas usually find out the hard way about areas of dispute in their insurance policies. Below is some information to be aware of.

Life insurance coverage is fairly straightforward. If the insured person dies during the policy term, the insurance company pays the benefits. The following are some ways that disputes may arise:

1) An agent may misrepresent the benefits of his insurance company’s policy to induce the insured to switch from another company. See Texas Insurance Code, Section 541.061.

What types of insurance are available to people in Grand Prairie, Arlington, Mansfield, Cleburne, Weatherford, Granbury, or other places in Texas? The answer is the same where ever a person may live in Texas.

Common life insurance types are term, whole life, and universal life.

“Term” 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. Term policies do not accrue cash value. Because the insured is only paying for the death benefit, term policies are cheaper in the early years. As the insured gets older, the risk of death increases and so does the premium, so term may become more expensive than the other types. Insurance companies typically sell term policies that promise a fixed premium for a set number of years. For example, an insurer may sell a 10 year term policy that the insured may purchase and renew for the same annual premium during those years, without having to re-qualify.