Texas Statutes and Rules Pertinent to Life Insurance Only
A Texas owner's policy loan plus accrued interest grows until it equals the policy's cash value. What happens?
Answer and explanation
Answer: C. When indebtedness reaches the cash value there is nothing left to secure the loan and the policy terminates. Notice requirements give the owner an opportunity to repay part of the loan first.Source: Texas Insurance Code — Tex. Ins. Code ch. 1101, termination for excess indebtedness and required notice
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