What Life Insurance Policies Cannot Do

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 time to sue to a period of time of less than two years.  This is found in the Texas Insurance Code, Section 1101.053.  A person needs to be aware that there are situations where the insurance company limits the time to sue to two years and one day.  While this is not common, it does happen, so be aware and don’t delay in talking to an attorney if your claim gets denied.  Procrastination could result in being out of court on a claim you may be able to prevail on.

Section 1101.054, states that a policy cannot purport to take effect more than six months before the original application date, if that would qualify the insured for a rate based on a younger age group.  For purposes of this section, the age of the insured on the date of the application is the age of the insured on the birthday of the insured that is nearest to the date of the application.  The benefit to the insurance company is that they get a higher premium from the owner of the policy.

Section 1101.055 states that a policy of life insurance cannot limit benefits, except if the death resulted from suicide, stated hazardous occupations, or aviation activities.  Normally, rather than limits on benefits, these causes of death are excluded from coverage and are areas that result in litigation.  Never except a denial or a reduction in payment on a policy without talking to an attorney who handles life insurance cases.

Insurance Code sections 705.001 to 705.004 state a policy cannot contain any provision that statements or answers in the application, if untrue or false, render the policy void.  This is the most litigated area of life insurance claims.  If ever a claim is denied based on the assertion that the policy application contains untrue or false statements or misrepresentations, see a life insurance lawyer.  Period!

Contact Information