State RegulationsTX specificDifficulty 1/5
Under TIC 1101.005, what grace period must an individual life insurance policy delivered in Texas provide for the payment of each premium after the first?
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
Under TIC 1101.005, an individual life policy delivered in Texas must contain a provision for a grace period for the payment of every premium after the first. TIC 1101.005 requires the grace period to be at least one month; 31 days is the standard Texas figure used on the licensing examination. During the grace period the coverage remains in force, and TIC 1101.005 permits the insurer to charge interest on a premium paid during that period.
Why the other options are wrong
- A) Ten days is the free-look period for a new policy under 28 TAC 4.2311, not the grace period required by TIC 1101.005.
- B) Fifteen days is the extended free-look period that applies when the Buyer's Guide is not provided, not the grace period.
- C) Twenty days is the free-look period required in a replacement transaction under 28 TAC 4.2311, not the grace period.
Memory hook
Grace is a month: TIC 1101.005 says at least one month, so answer 31 days.