Texas Statutes and Rules Pertinent to Life Insurance Only
A Texas whole life policy has accumulated cash value and the owner requests a policy loan. What is the insurer's obligation?
Answer and explanation
Answer: C. The policy loan provision is a contractual right of the owner. Once cash value exists, the insurer must lend up to the loan value at the interest rate the policy specifies.Source: Texas Insurance Code — Tex. Ins. Code ch. 1101, required policy provisions including policy loans
More texas statutes and rules pertinent to life insurance only questions
- A Texas ordinary whole life policy reaches its stated maturity date and the insured is still alive. What does the insurer do?
- A Texas owner pays an annual premium and the insured dies four months into that policy year. What happens to the unearned premium?
- A Texas owner's policy loan plus accrued interest grows until it equals the policy's cash value. What happens?
- A Texas policy states that no suit may be brought more than six months after a claim is denied. How is that clause treated?
- An insured has a life insurance policy with a $100,000 death benefit. To secure a bank loan, the insured executes a collateral assignment. If the insured dies when the outstanding loan balance is $30,000, how will the death benefit be distributed?
- An insurer wants to contest a Texas policy using a statement the applicant made on the application, but no copy of the application was attached to the policy. What is the result?
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