Texas group life insurance

II.D Group life

Texas group life is a life-only statute topic on the Texas Life producer exam (InsTX-Life01) outline in force on or after 1 September 2026. These unofficial notes cover six numbered items: who may be insured as a group, conversion to an individual policy, dependents, assignment, required provisions, and accelerated benefits. The printed weight for the whole life-only section is 10 scored questions. They are not exam items, not a prelicensing course, and not affiliated with Pearson VUE, TDI, or NAIC. Passing is not guaranteed.

Pair this page with the general-knowledge group-life notes under retirement and tax concepts. That page teaches master policy versus certificate, contributory versus noncontributory, and the conversion idea. This page adds the Texas eligibility and conversion rules that sit in the life-only outline.

II.D.1–2 Eligibility, underwriting, and conversion

An employer group, or a trust fund set up by an employer, may insure employees for the benefit of someone other than the employer. Eligible lives are all employees, or all of a class defined by work conditions—not a hand-picked list of friends. Teaching minimum at issue is at least two employees. Face amounts must follow a plan that prevents individual selection by the employee or the employer. A noncontributory (employer-pay-all) plan is supposed to cover all eligible employees, except those who fail individual evidence if the insurer asks for it.

When employment or membership in an eligible class ends, the individual can convert the terminating group life to an individual policy without evidence of insurability and without disability or other supplementary benefits. Application and first premium are due not later than the 31st day after termination. The converted form is typically any individual policy the insurer customarily issues other than term, for an amount not larger than the group coverage that just ended, at attained-age rates.

If the whole group policy ends, or is amended to drop a class, conversion is narrower: people who have been insured under that group for at least five years may convert, and the amount may be capped (a common teaching cap is $2,000). A covered spouse whose group term ends because the employee dies, leaves, or the group contract ends generally has the same conversion rights on the spouse’s own coverage. Death during the conversion window is the fact pattern that still pays the group benefit even if the individual application never arrived.

II.D.3–6 Dependents, assignment, required terms, acceleration

Dependent coverage lets the group insure a spouse or other family members on the employee’s certificate. Amounts on dependents are usually smaller than the employee’s schedule. The form may continue some family or dependent benefits after the employee dies. Those continued amounts are a separate teaching point: they are not treated as extra term that blows a per-life maximum the way a new employee schedule would.

Assignment of a group certificate, where the form allows it, lets the insured transfer rights or name an assignee. It does not turn the employer into the owner of each employee’s individual policy, and it does not replace conversion. Required provisions on the group master policy are the Texas group cousins of the individual list: grace, incontestability, entire contract, misstatement of age, and a conversion privilege printed in the contract—not just promised in a brochure.

Accelerated benefits can appear on group term as well as on individual forms. A qualifying medical opinion can release part of the certificate face while the insured is living, and that payment reduces what remains for the beneficiary and what could later be converted. Do not treat acceleration as a second policy. It is an early slice of the same death benefit.

A compact drill: two employees and a class defined by job → eligible group. Employer pays all and skips half the class without a stated evidence exception → participation problem. Employee quits and wants permanent coverage with no exam → 31-day conversion. Group shuts down after six years on the same master policy → five-year conversion path, possibly capped. Spouse still covered when the employee dies → dependent continuation or spouse conversion, not a brand-new underwriting file. If you can place the fact pattern on that map, you can separate Texas group life from the individual-provisions list.