Texas statutes and rules pertinent to life insurance only

group policy provisions

-2 year incontestability period -31 day grace period -misstatement of age, insurer will adjust premium and/or the benefit to correct age -dependent coverage applies to insured's spouse & kids -prohibited from including any provision that reduces time period during an action may be started under the policy to less than 2 years

termination and conversion of group life policies in texas

-eligible individuals who have covered under group policy for at least 5 yrs must apply for individual policy & pay first premium to the insurer 31 days after the date the individual's membership in a group plan terminates -individual policy must be issued w/out evidence of insurability -the insured has right to select any individual policy offered by the insurer, except for term insurance -amount of individual policy coverage cannot exceed the lesser amount of the prior group coverage

illustration must contain basic info

-name of insurer -name & business address of producer or insurer's authorized rep -name, age, sex of proposed insured -underwriting or rating classification upon which illustration is based -generic name of policy, company product name, & form # -initial death benefit -dividend option election or app of nonguaranteed elements -illustration date -a prominent label stating "life insurance illustration"

all insurers must offer at least once of the following nonforfeiture options:

-reduced paid-up -extended term -shortened benefit term

nonforfeiture requirements do not apply to the following types of insurance products:

-reinsurance -group insurance -pure endowment -annuities -most term policies -policies delivered outside of texas through an agent or other company rep -any policy that does not provide for cash values of nonforfeiture

viatical settlements may be rescinding within what time period after the viator receives the proceeds?

15 days

an individual covered under a group life insurance policy may convert the policy to any of the following except

15-year level term

purchasers of a fixed annuity must be provided a free-look period of at least

20 days, in which premiums and contract fees must be returned to the applicant

conversion to an individual whole life policy is permitted without evidence of insurability within how many days of the termination of employment?

31 days

interest-adjusted net cost method

Considers the time value of money by applying an interest adjustment to yearly premiums and dividends.

if a policyowner surrender his life insurance policy that has been in force for 5 years within 60 days after the premium due date, what will the insurer be required to pay?

a cash surrender value

grace period

a consumer must be provided a grace period of at least 1 month for the payment of each premium during which the policy remains in force

retroactive issuance, exchange or conversion

a life insurance policy may not contain a provision under which the policy is issued on a date more 6 MONTHS before the date of the application (BACKDATING) if it causes the insured to rate to an age that is younger than the insured's age on the date of app

certain limitation periods

a life insurance policy may not include a provision that limits the time during which a lawsuit may be filed to a period of less that 2 years after the cause of action

policy loans

a life insurance policy must allow the policy to take out a policy loan from the policy's cash value as long as: -the policy is in force -premiums have been paid for at least 3 full years -the policy is properly assigned

dividend

a payment made by a policy (distribution of profits or returned of unused funds)

claimant

a person who submits a claim for payment of benefits

illustration

a presentation or depiction that includes non guaranteed elements of a policy of individual or group life insurance over a period of years

advertising must be

accurate and not misrepresent the facts

not part of contract

an illustration must clearly state that it is not a part of the insurance contract

replacement

any transaction in which new life insurance or a new annuity is purchased and

the insured must

assign all rights & policies

group policy issued in texas must cover

at least 2 employees

solicitation of insurance

attempt to persuade a person to buy a policy

what info cannot be disclosed to the viator prior to the execution of a viatical settlement contract?

availability of stranger-originated life insurance (STOLI)

Upon the submission of a death claim under a life insurance policy, when should the insurer pay the policy benefit?

within 2 months

credit insurance

written to insure the life of the debtor and pay off balance of a loan in the event of the death of the debtor

duty of agents

before using an ad, an agent must file its contents with the home office of the insurer, and receive a written approval

the creditor is the owner and the

beneficiary of the policy although the premiums are generally paid by the borrower (debtor)

NOT TRUE statement about credit life insurance

benefits are paid to the borrower's beneficiary

nonforfeiture values

benefits in a life insurance policy that the policyowner cannot lose

nonforfeiture benefits are

built into the policy and provide a guarantee that they cannot be forfeited (lost) by the policyowner. regulated by state laq

credit life insurance

cannot pay out more than the balance of the debt

what is used to compare the cost of one life insurance policy against another in order to guide prospective purchasers to policies that are competitively priced?

cost comparison methods

credit life is usually written as

decreasing term insurance

the usage of words or symbol that are similar to what entity is prohibited in life insurance ads?

federal government

when possible, what should insurers strive to eliminate from illustrations?

footnotes and caveats

free look provision

if a buyer's guide and disclosure doc are not provided to the applicant at or before the time of the application, the applicant must be allowed a free-look period of at least 15 calendar days during which the applicant may return the policy for unconditional refund without penalty

policy proceeds

in life insurance, the death benefit

duty of insurers

insurers marketing policies in TX must maintain a system of control over the content, form, & method of dissemination of all ads on their policies

upon surrender of policy

no later than 60 days after due fate of premium payment, company will pay a cash surrender value (instead of a paid-up nonforfeiture benefit)

if a person is compensated for a testimonial in an ad, which of the following statements should be included in the ad?

paid endorsement

nonguaranteed elements

policy components that are not guaranteed in the contract or that may fluctuate

lapse

policy termination due to nonpayment of premium

rescind

remove or cancel (ex: void a contract)

the insurer whose policies are advertised is

responsible for all its advertisements. regardless of who wrote, created, presented, or distributed them

disclosure

revealed information to help someone make an intelligent and educated decision

testimonials

statements or endorsements made by clients based on their experience with products or services

the initial amount of credit life insurance may NOT exceed

the amount to be repaid under the contract

replacing insurer

the company that issues the new policy -present to a notice regarding replacement that is signed by applicant & producer -obtain list of what needs to be replaced -leave applicant with OG copy -submit placing insurance company a copy of replacement notice with app

existing insurer

the company whose policy is being replaced -get list from producer of applicant's life insurance or annuit contracts -send existing insurance company written communication advising proposed replacement

coverage under group life may extended to

the insured's spouse and eligible children

higher the CIR

the less expensive the higher-premium policy

settlement upon maturity

the life insurance policy may not contain a provision for a settlement at maturity that is LESS THAN THE FACE AMOUNT of the policy plus the amount of any dividend additions to the policy minus any debt owed to company & any premium that may be deducted from the settlement

comparative interest rate method (CIR)

the rate of return that must be earned on a "side fund" in a buy term invest the difference plan so that the value of the side fund will be equal to the surrender value of the higher premium policy at a designated point in time

values not guaranteed

those values that are not guaranteed must be identified as such

which of the following CANNOT be included along with illustrations used to sell life insurance?

vanishing premium info