Texas Statutes and Rules Pertinent to Life Insurance Only
Under Texas law, why does the advance payment principle make the grace period necessary?
Answer and explanation
Answer: C. Each premium prepays a defined period. Without a grace period the contract would terminate immediately at the end of that period, so the statute requires extra time to pay before coverage ends.Source: Texas Insurance Code — Tex. Ins. Code ch. 1101, grace period and continuation of coverage
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