Life insurance lawyers need to be aware of the common types of life insurance.

Common life insurance types are term, whole life, and universal life.

“Term” policies simply provide a death benefit in return for a premium payment.  at the end of the policy year, or “term,” the insurance ends, and the policy has no value.  Term policies do not accrue cash value.  Because the insured is only paying for the death benefit, term policies are cheaper in the early years.  As the insured gets older, the risk of death increases and so does the premium, so term may become more expensive than the other types.  Insurers typically sell term policies that promise a fixed premium for a set number of years.  For example, an insurer may sell a 10 year term policy that the insured may purchase and renew for the same annual premium during those years, without having to re-qualify.

Life Insurance Lawyers need to start out with some basic knowledge.  This Blog site provides a lot of information that is vital to know when a life insurance claim is being denied.  Here is some very elementary information.

Life insurance pays a stated amount of benefits to the beneficiary upon the insured’s death.  Typically, the policy has a “face amount” — that is, a stated value that is payable upon the insured’s death.  Some policies may offer increased benefits if the insured dies from certain causes.  For example, some policies pay “double indemnity” benefits if the insured dies in an accident.

“Term” policies pay a fixed amount stated in the policy.  Whole life policies accumulate cash value, and may pay the face amount plus any accumulated cash value.  On the other hand, if the policy allows the insured to borrow against the policy, the death benefit may be reduced by the amount of any outstanding loans.

The Amarillo Court of Appeals issued an opinion on August 24, 2021, that is important to anyone having a life insurance claim denied due to an allegation that there was a misrepresentation made in the insurance application.  The style of the opinion is, Arce v. American National Insurance Company.

In this Blog we will set out the facts of the case.  The opinion itself needs to be read if you are handling a life insurance claim that is being denied.  It is important to note that as of the date of this post, the case is on appeal to the Texas Supreme Court.  This is a class action lawsuit.

Appellant, Bertha Arce, Individually and as Representative of All Others Similarly Situated challenges the trial court’s rendition of summary judgment in favor of Appellee, American National Insurance Company, on her claims for breach of contract and violations of the Texas Insurance Code, as well as her claim for recovery of attorney’s fees and class action claims.  Through two issues, Arce contends the trial court erred in (1) overruling her objections to American National’s summary judgment evidence, and (2) granting American National summary judgment on her claims.  We reverse the judgment of the trial court and remand for further proceedings consistent with this opinion.

Life Insurance Attorneys can discuss the present state of the law in Texas as it relates to life insurance policies that are governed by State Law.  However, as of the date of this post, there is a new case in the Texas Supreme Court which may change the law or confirm it, depending on your perspective.


In 2013, the Dallas Court of Appeals decided Medicus Insurance Co. v. Todd.  Todd follows an earlier seminal case regarding alleged misrepresentations in a life insurance application, Mayes v. Metropolitan Mutual Life Ins. Co.  In Mayes, the Texas Supreme Court held that there are five factors that must be proven before a life insurance policy can be rescinded on the basis of misrepresentations in a life insurance application: (1) the making of the representation; (2) the falsity of the representation; (3) reliance on the misrepresentation by the insurer; (4) the insured’s intent to deceive the insurer; and (5) the materiality of the misrepresentation.  In Todd, the Court found that these five factors applied regardless of whether the insurer attempted to rescind the policy for common law misrepresentations or under statutory provisions like section 705.104 of the Texas Insurance Code.  In 2020, the U.S. District Court for the Southern District of Texas added another layer to this discussion in Landeros v. Transamerica Life Ins. Co.  The Landeros Court observed that two different statutes apply to the rescission of life insurance policies – one when the policy is rescinded within two years of its issuance and the other that applies outside the two year period.  Noting that Transamerica Life Insurance Company rescinded the policy within two years of its issuance, the Court determined that section 705.051 is the applicable statute.  Although, the statutes are similar, section 705.104 (applicable in Todd) requires that the misrepresentation be made :intentionally.”  Because section 795.105 (the statute at issue in Landeros) does not contain this requirement, the Court concluded that an insurer who seeks to rescind a life insurance policy within two years from the date of issuance is not required to prove the insured’s intent to deceive.

Insurance agents can be responsible for their own actions under the Texas Insurance Code.

Just as an insurance company is liable for its own misconduct, so too agents may be personally liable for their misdeeds, even when acting on behalf of an insurance company.  In general, an agent is individually liable for his or her own tort or statutory violation.  This is discussed in the 1985, Texas Supreme Court opinion, Weitzel v. Barnes, and in the 1983, Texas Supreme Court opinion, Light v. Wilson, and the 1991, Austin Court of Appeals opinion, State Farm Fire & Casualty v. Gros.

It is not normal for the agent to be liable for breach of contract based on the insurance policy, because the contract of insurance is not between the insured and the agent.

Being aware of when the statute of limitations runs on a claim is vital so that the limitations period does not expire.  This is illustrated in the 2022, opinion from the Western District of Texas, San Antonio Division.  The opinion is styled, Tobin Endowment v. Great American Assurance Co.

Tobin Endowment is the insured and Great American is the insurer.

Tobin filed this lawsuit on August 23, 2020, claiming that Great American underpaid the claimed loss.  Great American eventually filed this Motion For Summary Judgment stating to the Court that Tobin let too much time expire and that Tobin’s claim is barred by the statute of limitation stated in the policy.

Most insurance claims will not end up in a lawsuit.  However, for those claims that do end up in a lawsuit it is important for the insured to understand their responsibilities when in the lawsuit.  The failure of a party to the lawsuit to cooperate in the litigation process can be fatal to the lawsuit.

The above is illustrated in a 2022, opinion from the Austin Court of Appeals.  The opinion is styled, Michael V. Wright and Phyllis F. Wright v. State Farm Lloyds.

The Wrights were insured by State Farm with a homeowners policy.  The Wright’s suffered losses stemming from two fires to their residence.  One in 2013, and the other in 2015.

Here is a case where the insurance company complains that it did not receive proper pre-suit notice of the claim.  The Court disagreed with the insurance company.

This is a 2022 opinion from the Northern District of Texas, Dallas Division.  It is styled, Douglas D. Dailey, et al., vs. Amguard Insurance Company.

Dailey sued Amguard in State Court and Amguard timely and properly removed the case to Federal Court then moved under the Texas Insurance Code, Section 542A.005(a)(1), to abate the case until the 60th day after Dailey give notice that complies with Section 542A.003 of the Texas Insurance Code.

Bad Faith Insurance Lawyers need to read this 2022 opinion from the Northern District of Texas, Dallas Division.  The style of the case is, Vernon Humphries and Rebecca Humphries v. State Farm Lloyds.

The Humphries sued State Farm alleging State Farm failed to pay the full amount of their claim.  After litigating some of the case, State Farm filed a motion for summary judgment regarding Humphries’ bad faith claims.

We will not state the detailed facts of this case.  To get the facts of this particular case, a reading of the opinion is necessary.

An often asked question by insureds having a claim against their insurance company is, “Can I recover my attorney fees?”  There is not a simple straight forward answer to this question.  Many variables come into play.  “Yes” is a simple answer but does not get into the variables.

A 2022, opinion from the Northern District of Texas, Dallas Division, discusses this issue as it relates to claims under Texas Insurance Code, Section 542A.003.  The style of the opinion is, Betty Rahe v. Meridian Security Insurance Company D/B/A State Automobile Mutual Insurance Company and Larysa Santiago.

Plaintiff sued Defendant on a claim arising from wind and hail damage to her property.

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