Completing the Application, Underwriting, Delivering Policies, Contract Law
When must an insurable interest exist in life insurance contracts under Texas law?
Answer and explanation
Answer: A. In life insurance, insurable interest must exist at the inception of the contract; it is not required at the time of death.Source: Texas Insurance Code Chapter 1103 — § 1103.054, Insurable Interest Timing
More completing the application, underwriting, delivering policies, contract law questions
- An applicant submits truthful application statements and the required initial premium. What does the insurer furnish as its side of the contract's consideration?
- An applicant will keep an existing policy nominally in force but reduce its face amount to fund the new policy. Which replacement disclosure is appropriate?
- An applicant with average health, normal build, and no hazardous hobbies is classified into which standard underwriting category?
- An applicant with superior health, excellent family history, and non-smoker status is placed in which underwriting risk class, receiving lower premium rates?
- An application stipulates that coverage will not begin until the policy is delivered, accepted, and the first premium is paid. If the policy is delivered but the initial premium remains unpaid, why is the insurer not liable for a claim?
- An insured pays a single monthly premium and dies the next week, and the insurer pays the full face amount. Which contract characteristic does this illustrate?
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