Texas Statutes and Rules Pertinent to Life Insurance Only
A Texas insured dies with an outstanding policy loan and accrued loan interest. How is the death benefit settled?
Answer and explanation
Answer: B. A policy loan is a lien against the policy. At death the insurer deducts the loan balance and accrued interest from the proceeds and pays the remainder to the beneficiary.Source: Texas Insurance Code — Tex. Ins. Code ch. 1101, effect of policy indebtedness on proceeds
More texas statutes and rules pertinent to life insurance only questions
- Under TIC § 1101.005, if a premium is not paid by the due date, how long does policy coverage remain in force during the grace period?
- Under TIC § 1101.005, what statutory minimum grace period must be provided for premium payments on individual life policies in Texas?
- Under TIC § 1101.009, can an insurer charge interest on back premiums when an insured reinstates a lapsed life policy?
- Under TIC § 1101.009, what maximum timeframe is allowed for an insured to reinstate a lapsed life policy by paying back premiums plus interest and providing proof of insurability?
- Under TIC § 1103.104, from what date is interest calculated if a life insurer delays death benefit payment past 60 days?
- Under TIC § 1131.051, what condition applies to employer-sponsored group life insurance coverage for retired employees?
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