Texas life-only statutes and rules

II. Texas statutes and rules pertinent to life insurance only

The Texas Life producer exam (InsTX-Life01) outline in force on or after 1 September 2026 weights LIFE AGENT STATE SPECIFIC II at 10 of 30 scoreable Texas questions (10 of 80 scored total). These unofficial notes cover every leaf on that node from Pearson VUE booklet 124401 (8/2026). They are not a prelicensing course, not affiliated with Pearson VUE, TDI, or NAIC, and are not copied from any live exam. Passing is not guaranteed. Citations are TIC or TAC Title 28 as printed. Do not invent statute numbers. Day counts and dollar caps are not printed as numbers on this node — confirm with current TIC/TAC / TDI. Outline lettering skips C (letters present: A, B, D, E, F, G).

State Specific I is commissioner, licensing, unfair practices, and the guaranty association. This page is life-only: marketing, individual provisions, group, credit life, replacement, and nonforfeiture. Pair the general-knowledge pages for concepts; this page is the Texas statute list.

II.A Marketing and solicitation

Life ads and illustrations must be truthful (TAC § 4.1003, 21.104–.105, 21.107, 21.111, 21.114, 21.122, 21.2201–.2214). Separate guaranteed from nonguaranteed elements. Use insurer-authorized forms. Do not imply guarantees the contract does not give. An illustration is not a promise. Showing only the highest nonguaranteed rate as guaranteed violates the rules.

When required, deliver a Buyer’s Guide and policy summary (TAC § 4.2310). Timing: confirm with current TAC / TDI. Testers treat this as required disclosure. A delivery package that includes the guide and summary is the usual fact pattern.

II.B Individual life and annuity policy provisions

Required and prohibited terms for individual life (and related annuity) forms sit under TIC 1101.001, 1116.002, and the leaf cites below. Day counts: confirm with current TIC/TAC / TDI.

Free look lets the owner return the policy after delivery for a premium refund (TAC § 4.2311). Day count and clock start: confirm with current TAC / TDI. Testers: post-delivery cooling-off (also on general-knowledge II as a concept). Grace period means a late premium does not immediately lapse (TIC 1101.105). Coverage continues; death during grace usually pays minus unpaid premium. Length: confirm with current TIC / TDI. Free look returns the policy after delivery. Grace keeps coverage after a missed premium due date.

Cash-value forms must allow loans when the statute applies (TIC 1101.009). Interest accrues; unpaid loan reduces the death benefit. Confirm interest wording with current TIC / TDI. A loan is a debt. Certain clauses are barred (TIC 1101.054; TAC § 4.620). Forms cannot gut required protections.

After the statutory period in force during the insured’s lifetime, the insurer generally cannot contest application statements (TIC 1101.006). Period: confirm with current TIC / TDI. Age errors are adjusted, not barred. Incontestable is not immune to age correction. The policy plus the attached application (when made part of it) is the entire contract (TIC 1101.003). Oral promises are not. Premiums are payable in advance (TIC 1101.004; TAC § 4.601).

Absent fraud, statements are representations, not warranties (TIC 1101.007). Material falsehoods can void during the contestable period; immaterial errors should not. Wrong age adjusts the benefit to what the premium would have bought at the correct age (TIC 1101.008; TAC § 4.606). It is not an automatic void. Texas sets timing for paying life claims after due proof (TIC 1101.011; TAC § 4.612). Day counts and delay interest: confirm with current TIC/TAC / TDI.

The owner may designate a beneficiary and transfer or assign the policy as allowed (TIC 1103.055). Irrevocable designations and collateral assignments can restrict changes. Rules on assigning claim proceeds (TIC 1108.101; TAC § 4.623) are distinct from assigning ownership of the policy. Acceleration on term life (TIC 1111.052, 4.1101 as printed) pays part of the death benefit early for a qualifying condition; remaining face drops. It is a living benefit from the same face, not a separate health policy.

Lapsed policies may be restored if conditions are met (TAC § 4.611). Evidence of insurability, back premiums, and time limits: confirm with current TAC / TDI. Reinstatement restores the old contract; a new policy is attained-age. Suit-limitation rules cap how long a claimant has to sue (TAC § 4.619). Exact periods: confirm with current TAC / TDI. When a policy matures, settlement rules govern payment of the maturity value (TAC § 4.621). Maturity pays the living maturity value; death claims are a different path.

II.D–E Group life and credit life

There is no outline letter C. Group rules sit in TIC Chapter 1131 (cites as printed). Only statutory groups may be written; underwriting is often at group level (TIC 1131..204 as printed). Eligible list: confirm with current TIC / TDI. A random club may not qualify. An employer-employee master policy under Chapter 1131 is the usual example.

When group coverage ends, convert to individual coverage without evidence of insurability if notice and timing are met (TIC 1131.110–.111; 354, .802 as printed). Day counts: confirm with current TIC / TDI. This is the Texas version of the general-knowledge conversion concept. Conversion privilege as a concept sits on LIFE-GENERAL IV; Texas D.2 is the TIC 1131 timing, notice, and eligibility version.

Dependents may be covered when statute and plan allow (TIC 1131.151). Who qualifies and face limits: confirm with current TIC / TDI. Coverage is not automatic on every plan. Group certificates or proceeds may be assigned as allowed (TIC 1131.006). Group forms must include required provisions (1131.101 as printed) — grace, incontestability, certificates, conversion mention, and similar. Exact list: confirm with current TIC / TDI. Group acceleration under cited rules (TIC 1551.254, 4.1101 as printed) pays part of the death benefit early for a qualifying condition; remaining benefit drops.

Credit life pays the unpaid debt if the insured debtor dies (TIC 1153.003, .004, .151, .153, .155, .157, .201–.204; TAC § 3.5001–3.5206). The creditor is typically beneficiary for the balance. Amount and premium caps: confirm with current TIC/TAC / TDI. It is debt protection, not family income replacement. Decreasing credit life on a car loan that pays the loan at death is the usual example.

II.F–G Replacement and nonforfeiture

TIC 1114.001 protects consumers when new life replaces existing coverage, through disclosure of new contestable and suicide periods and lost riders. Replacement is regulated disclosure, not a ban. TIC 1114.002 defines replacement and related parties and transactions. Exact wording: confirm with current TIC / TDI. If the definition is met, duties attach.

The agent obtains required statements, gives notices, and files paperwork with the application (TIC 1114.051–057). Forms and timing: confirm with current TIC / TDI. Testers: disclose and document. Identify the existing policy, get signed notices, submit copies. The replacing insurer notifies the existing insurer, keeps records, and ensures disclosures (TIC 1114.051–057). Agent and replacing company share compliance: the agent discloses; the replacing company notifies and supervises.

Cash-value life must provide nonforfeiture benefits on lapse or surrender (TIC 1105.00–.153 as printed; TAC § 3.3844). Options taught on general-knowledge II: cash surrender, reduced paid-up, extended term. Minimums: confirm with current TIC/TAC / TDI. This is a statutory floor. Nonforfeiture is cash-value protection on lapse. Dividends are participating surplus returns on the general-knowledge outline, not this leaf.