Life Insurance Policy – Required Provisions

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.
2) The policy must provide for payment of premiums in advance at the insurance company’s home office or to an agent. See Texas Insurance Code, Section 1101.004.
3) A grace period of at least a month must be given. Texas Insurance Code, Section 1101.005. The Texas Administrative Code can also come into play here in determining the dates that may apply.
4) The policy and application shall constitute the entire contract. See Texas Insurance Code, Section 1101.003.
5) The policy must contain a provision that the policy is incontestable after two years, except for non-payment of premiums. See Texas Insurance Code, Section 1101.006. These incontestability clauses severely limit an insurer’s ability to contest coverage.
6) All statements by the insured shall, in the absence of fraud, be deemed representations and not warranties. See Texas Insurance Code, Section 1101.003. This distinction means the insurance company must show a false statement was material and was made with intent to deceive, before the insurance company can assert the insured’s misstatement as a basis for denying benefits.
7) If the insured’s age is misstated, the amount payable will be adjusted based on the correct age. See Texas Insurance Code, Section 1101.008.
8) After three years of premium payments, the insurance company must agree to loan the insured the accrued cash value, if any. See Texas Insurance Code, Section 1101.009.
9) The policy must contain certain nonforfeiture provisions. See Texas Insurance Code, Section 1101.010.
10) When the policy becomes a claim upon the insured’s death, settlement shall be made within two months. See Texas Insurance Code, Section 1101.011.
11) With certain conditions, policies must allow for reinstatement if the lapse was due to the insured’s mental incapacity. See Texas Insurance Code, Sections 1106.002 thru 1106.006.
Anytime one of these provisions in not in a policy and the insurance company denies coverage based on the provision not being in the policy it is important that the advice of an experienced Insurance Law Attorney be obtained.