State RegulationsTX specificDifficulty 3/5
The incontestability period on a Texas life policy has already expired. Which ground may the insurer still use to deny a claim?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
Under TIC 1101.006, only two things survive the incontestability clause: nonpayment of premiums, and, at the insurer's option, a violation of the policy's naval or military service conditions in time of war. The practical distinction is that nonpayment is not a contest of the policy's validity at all — it is a coverage question about whether the policy was still in force — so it remains available no matter how much time has passed.
Why the other options are wrong
- A) Failure to disclose another policy is a misrepresentation defense, and it is barred after the contestable period ends.
- B) A producer's sales misrepresentation is a market-conduct issue and is not a ground for rescinding a policy that has become incontestable.
- D) A material health misstatement is the classic defense the clause cuts off once the 2-year period has run.
Memory hook
Pay the premium or lose the shield — nonpayment is the one fight the clause never ends.