Important Texas life insurance laws
Texas-based insurers have state guidelines that they must adhere to by law. These are solely to protect policyholders and show how policies should work.
Free look period
If a policyholder chooses to cancel their policy within 10 days of purchasing, a full refund of their initial premium payment will be issued. If a policyholder chooses to cancel their policy after 10 days of purchasing, a full refund of their initial premium payment is issued.
Guaranty Fund Protection
When a premium payment has been made, coverage is instantly protected by the Texas Life and Health Insurance Guaranty Association. Should a provider fail, the association guarantees coverage of up to $300,000 in life insurance death benefits, including $100,000 in life insurance cash value.
In Texas, a two-year contestability period is provided . During these two years, companies can reject claims if they have good reason to believe that an application included false information.
Time allowed to settle a claim
Life insurance companies in Texas must, by law, fulfil claim payouts within two months of receiving evidence that the policyholder has died. Accrued interest begins on the day the insurer receives this evidence.
Grace period for missed payments
A grace period of 31 days is given to policyholders in Texas, should they miss a payment. After the 31 days have passed, the policy will be cancelled. This grace period allows customers to catch up with any of their missed payments.