A Texas policyowner applies for a policy loan under TIC 1101.009. Which of the following is a condition that must be satisfied before the insurer is required to make the loan?

Why D is correct

Under TIC 1101.009, an insurer must make a policy loan available once the policy is in force, premiums have been paid for at least three full years, and the policy has been properly assigned to the insurer as security. Because the loan is secured only by the policy, the insurer may not look to the owner's credit, require a co-signer or demand income verification. Certain contracts are exempt from the requirement, including term life policies and other policies without cash values.

Why the other options are wrong

• A) Naming a revocable beneficiary is not a loan eligibility requirement under TIC 1101.009; the prerequisites are that the policy be in force, that premiums have been paid for at least three full years, and that the policy be properly assigned as security.
• B) Term policies and other contracts without cash values are exempt under TIC 1101.009, so no loan is available against them regardless of assignment.
• C) The loan is secured only by the policy, so the insurer may not condition it on the owner's creditworthiness or income.

Memory hook

Policy loan equals in force, three full years, policy pledged.