Important Texas life insurance laws
Insurance providers in Texas have state guidelines that they must follow by law. These are put in place to protect policyholders and outline how policies work.
Free look period
If a policyholder wishes to cancel their life insurance within 10 days of purchasing the policy, they are entitled to a full refund of their initial premium payment.
If a policyholder wishes to cancel after 10 days of receiving the policy, a full refund of their initial premium payment will be issued.
Guaranty Fund Protection
After a premium payment is made, coverage is instantly protected by the Texas Life and Health Insurance Guaranty Association. If a provider fails, the association guarantees coverage of up to $300,000 in life insurance death benefits, including $100,000 in life insurance cash value.
Texas provides a contestability period of up to two years. During this period, insurers can reject claims if they discover that an applicant submitted false information.
Time allowed to settle a claim
Texan insurers must make payouts within two months of receiving evidence that a policyholder has deceased. Interest will also start to accrue on the day the insurer receives this proof.
Grace period for missed payments
A grace period of 31 days is given to policyholders in Texas, should they miss a payment. After this time, coverage may be canceled. This grace period is put in place to allow policyholders to catch up with any missed payments.