Here is a 1980, Texas Supreme Court opinion wherein the Court found no bad faith and in fact found in favor of the insurance company. The opinion is styled, Life Ins. Co. of the Southwest v. Overstreet.
This was an unusual case in that the dispute was over whether or not a premium had been timely paid.
Maxie Overstreet, the insured, died on April 24, 1974, at which time he had not paid the 1974 annual premium on the policy. Life Insurance Company (LIC) says that by the date of death, the policy had lapsed because the premium had fallen due on March 15, 1974, the thirty-one-day grace period had expired on April 15, and the insured’s death on April 24 had occurred nine days after the grace period’s termination. Jacquei Overstreet says that the premium payment date was April 18 rather than March 15, that non-payment of the annual premium on April 18 did not end the policy until thirty-one more days, and that Overstreet’s death on April 24 was well within the grace period.