Texas Life & Health: Life Insurance Policy Provisions, Riders & Options

Correct

The answer is B: The death benefit will be paid, minus the unpaid premium.

The Grace Period provision keeps the policy in force for a period after the premium due date even though the premium hasn't been paid. Texas requires a grace period of at least one month (Insurance Code §1101.005), and many policies state it as 31 days. If the insured dies during the grace period, the death benefit is paid minus the overdue premium. The insured died on May 20th, well within the grace period that began May 1st, so the policy was still in force.

Source: Insurance Code §1101.005

Correct

The answer is B: 30 days, because the new policy replaces existing coverage.

Under Texas Insurance Code §1114.053(e), when a new life insurance policy replaces existing coverage, the replacing insurer must give the owner the right to return the policy within 30 days of delivery for an unconditional full refund. Texas sets no statutory free look for an ordinary new life policy; 10 days is the Texas rule for variable life (28 TAC §3.804), not for all life policies. Medicare Supplement policies also have a 30-day free look, but under a separate rule (§1652.155). Twenty days is the Texas free look for annuity contracts (§1116.002), not for a replacement life policy.

Source: Insurance Code §1114.053(e) · Insurance Code §1652.155 · Insurance Code §1116.002

Correct

The answer is B: The policy automatically converts to Extended Term Insurance.

If the owner makes no election, the policy itself names the paid-up nonforfeiture benefit that takes effect automatically. Texas requires every policy to specify that benefit, which applies unless the owner elects another option within 60 days after the due date of the missed premium (Insurance Code §1105.004(c)(2)). Most policies name Extended Term Insurance, which keeps the original face amount in force for as long as the cash value will buy term coverage.

Source: Insurance Code §1105.004(c)(2)

Correct

The answer is D: $100,000 — only the base policy face amount, because death was not accidental.

The Accidental Death Benefit (double indemnity) rider pays the additional benefit ONLY when death is caused by an accident as defined in the policy. Natural-causes death triggers only the base policy face amount of $100,000.

Reviewed in our October 2026 Texas fact-check.

Correct

The answer is A: No — after 2 years, the incontestability clause bars contesting it.

A Texas life policy must become incontestable once it has been in force for two years from issue during the insured's lifetime, except for nonpayment of premium (Insurance Code §1101.006). Section 705.104 agrees for honest errors: after the second anniversary, with premiums paid, a misrepresentation defense fails unless the misrepresentation is shown to be material and intentionally made, or the insurer had already notified the insured that it intended to rescind. This statement was an honest mistake, so the insurer cannot void the policy over it.

Source: Insurance Code §1101.006 · Insurance Code §705.104