Free Types of Life Insurance Policies Study Guide
Texas Life Agent exam — Types of Life Insurance Policies.
The national guide covers term, whole life, universal and variable policies. The Texas questions in this area are about group life (TIC Chapter 1131) and credit life (TIC Chapter 1153). This guide covers both.
Group life (TIC Chapter 1131)
Eligibility and amounts
- An employer group must cover at least 2 employees on its date of issue (1131.204).
- A noncontributory policy must cover all eligible employees, except those whose insurability isn't satisfactory.
- Amounts must follow a plan, such as a multiple of salary, that prevents individual selection (1131.205).
- Dependents may be covered: a spouse, a child or grandchild under 25 (or an older age stated in the policy), and a disabled child (1131.802).
- An insured may assign group life rights to anyone except the employer (1131.006).
- The individual standard provisions don't apply. Group life has its own required provisions (1131.101).
Required provisions
| Provision | Texas rule |
|---|---|
| Grace period (1131.103) | 31 days. Coverage continues unless the policyholder gives written notice of discontinuance. |
| Statements (1131.104, 1131.105) | Statements are representations. An insured's statement can be used only if it's in a signed writing and a copy was furnished. |
| Certificates (1131.108) | Each insured gets a certificate showing coverage, beneficiary and conversion rights. It can be delivered electronically by agreement. |
Conversion
| Situation | Texas rule |
|---|---|
| Employment or membership ends (1131.110) | Apply and pay within 31 days. Choose any individual policy except term, at the attained-age rate, with no evidence of insurability. |
| Group policy ends (1131.111) | Insureds covered at least 5 years may convert. The policy may cap this at $2,000 or the lost coverage, if less. |
| Death during the conversion period (1131.112) | The convertible amount is paid as a group claim. |
| Spouse (1131.354, 1131.805) | A covered spouse has the same conversion rights as the employee. |
Credit life (TIC Chapter 1153)
- Issued only as term: individual term to the debtor, or group term to the creditor (1153.151).
- The amount can't exceed the total repayable on the debt (1153.155).
- Coverage ends no later than 15 days after the debt's scheduled maturity, unless coverage after that is free (1153.160).
- If credit insurance is required, the debtor may provide it through an existing policy or any authorized insurer (1153.161).
- The creditor can't charge more than the insurer charges it (1153.201).
- The debtor gets unearned premium back if the debt ends early, but refunds under $3 aren't required (1153.202).
- The creditor can't act as the claim representative (1153.204).
Common exam traps
- Employer group life needs 2 lives.
- Group grace period: 31 days. Conversion within 31 days, to any plan but term.
- When the group policy ends, conversion needs 5 years of coverage and may be capped at $2,000.
- Group life can't be assigned to the employer.
- Credit life is term only, and the debtor can use any authorized insurer.
Practice Types of Life Insurance Policies questions All Life Agent topics
Practice questions are study aids generated for exam preparation and are not actual exam questions. Content is provided for educational purposes and is not legal advice. Verify current statutes, rules, and exam specifications with the Insurance Department and the exam administrator before relying on it.
