Prohibited Provisions In Life Insurance Policies

Life insurance lawyers know there are provisions that are illegal for an insurance company to put into a life insurance policy.  These provisions are found in the Texas Insurance Code, Sections 1101.051 to 1101.055.

Pursuant to these sections of the Texas Insurance Code, no life insurance policy may be issued or delivered to a person in Texas, or be issued by a life insurance company incorporated under the laws of Texas, if it contains any of the following provisions:

  1.  a provision limiting the time within which any action at law or in equity may be commenced to less than two years after the cause of action accrues;
  2.  a provision by which the policy purports to be issued or to take effect more than six months before the original application for the insurance was made, if the insured would thus rate at any age younger than his or her age at the date when the application was made, according to his or her age at his or her nearest birthday; or
  3.  any provision for a settlement at the maturity of the policy of less value than the amounts insured on the face of the policy, plus dividend additions, if any, less any indebtedness to the company on the policy, and less any premium that may by the terms of the policy be deducted.

There are two things to do if you see any of the provisions in a policy.  Contact the Texas Department of Insurance and contact an Experienced Insurance Law Attorney.