If insurance benefits are paid to a beneficiary who does not have an insurable interest, that beneficiary holds the proceeds for the benefit of those entitled by law to the proceeds according to a 1894, Texas Supreme Court opinion styled, Cheeves v. Anders. This proposition was upheld in a Tyler…
Who has an insurable interest in the life of someone else? The Texas Supreme Court in 1968, declared that a creditor may designate itself the beneficiary of a policy purchased by it on the life of its debtor, but its insurable interest is limited to the loan balance at the…
Going back to the 1894, Texas Supreme Court opinion, Cheeves v. Anders, it is a well settled proposition in Texas law that it is well-settled that a life insurance beneficiary must have an insurable interest in the insured’s life. The basis for the rule is twofold: no should have a…
Pursuant to Texas Insurance Code, Section 1103.151 and Section 887.205, a life insurance beneficiary who willfully participates in bringing about the insured’s death, either as a principle or as an accomplice, forfeits any right to benefits. The benefits are payable to any innocent contingent beneficiary or to the insured’s nearest…
What are some of the rules related to the naming of a spouse as the beneficiary in a life insurance policy? One spouse can designate his or her estate as the beneficiary of the policy, at the expense of the other spouse, absent a showing of actual or constructive fraud. …
Who is entitled to life insurance benefits? This may seem an easy answer and is most of the time, but not always. According to the Texas Supreme Court and Texas Insurance Code, Section 1103.102, the designated beneficiary of a life insurance policy generally is entitled to the proceeds upon the…
It is not an issue seen often by life insurance lawyers, but it does come up. When is the date coverage is in effect? Most policies expressly state the “effective date” of coverage. This date may be earlier than, or later than, the date the first premium is paid or…
The Texas Insurance Code spells out in law a few things that life insurance companies cannot do in their life insurance policies. Between the Texas Department of Insurance and the Texas Legislature here are a few things that are written into law. A policy of life insurance cannot limit the…
Life insurance coverage is fairly straightforward. If the insured dies during the policy term, the insurer pays the benefits. The following reasons are some ways that disputes may arise: An agent may misrepresent the benefits of his insurer’s policy to induce the insured to switch from another company. An agent…
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…