CHAPTER 1104. LIFE INSURANCE AND ANNUITY CONTRACTS ISSUED TO CERTAIN PERSONS
INSURANCE CODE
TITLE 7. LIFE INSURANCE AND ANNUITIES
SUBTITLE A. LIFE INSURANCE IN GENERAL
CHAPTER 1104. LIFE INSURANCE AND ANNUITY CONTRACTS ISSUED TO
CERTAIN PERSONS
SUBCHAPTER A. LIFE INSURANCE AND ANNUITY CONTRACTS WITH CERTAIN
MINORS
Sec. 1104.001. APPLICABILITY OF SUBCHAPTER. This subchapter
applies only to a policy or contract issued by a stock or mutual
legal reserve life insurance company that:
(1) is licensed by the department to transact the business of
life insurance in this state; and
(2) maintains the legal reserve required by state law.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1104.002. CERTAIN TRANSACTIONS EXEMPT. This subchapter
does not apply to a transaction between an insurance company and
a minor described by Section 1104.003(a) that occurs after the
date the company receives at its home office or its principal
office in this state written notice from a parent of the minor
stating that a parent or the parents of the minor elect that this
subchapter not apply to the minor specifically named in the
notice.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1104.003. AUTHORITY TO CONTRACT. (a) Subject to this
subchapter, a minor 14 years of age or older who is without a
guardian of the estate of the minor may:
(1) contract for or otherwise acquire a life, term, or endowment
insurance policy or an annuity contract, including:
(A) applying for the policy or contract; and
(B) making agreements with respect to the policy or contract or
a right, privilege, or benefit under the policy or contract;
(2) exercise all rights and powers in regard to the policy or
contract in the same manner as an adult; and
(3) surrender an interest in the policy or contract and give a
discharge for a benefit paid under the policy or contract.
(b) An insurance policy acquired by a minor under this
subchapter must:
(1) be owned by the minor; and
(2) insure the life of:
(A) the minor;
(B) a spouse, child, parent, grandparent, or sibling of the
minor; or
(C) another in whose life the minor has an insurable interest.
(c) A minor who acquires an annuity contract under this
subchapter is the annuitant of the contract during the minor's
life.
(d) A minor who acquires an insurance policy or an annuity
contract under this subchapter, the estate of the minor, or a
spouse, child, parent, grandparent, or sibling of the minor must
be the beneficiary of the policy or, in the case of an annuity
contract, of the death benefit of the contract.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1104.004. WRITTEN APPROVAL BY ADULT REQUIRED. An
application or agreement made by a minor under this subchapter
must be signed or approved in writing by:
(1) a parent, grandparent, or adult sibling of the minor; or
(2) if the minor does not have a parent, grandparent, or adult
sibling, an adult eligible under the Texas Probate Code to be
appointed guardian of the estate of the minor.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1104.005. RESCISSION BECAUSE OF MINORITY PROHIBITED. A
minor who acquires a policy or contract under this subchapter may
not by reason of minority rescind, avoid, or repudiate:
(1) the policy or contract; or
(2) the exercise of a right or privilege, or the receipt of any
benefit, under the policy or contract.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1104.006. EFFECT ON POLICY OR CONTRACT. This subchapter
does not modify any provision in a policy or contract.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
SUBCHAPTER B. TRUSTEE NAMED AS BENEFICIARY OF LIFE INSURANCE
POLICY
Sec. 1104.021. TRUSTEE NAMED AS BENEFICIARY IN POLICY. (a) An
individual may make a trust agreement providing that the proceeds
of a life insurance policy insuring the individual be made
payable to a trustee named as beneficiary in the policy. The
validity of a trust agreement or declaration of trust that is
designated as a beneficiary of a life insurance policy is not
affected by whether any corpus of the trust exists in addition to
the right of the trustee to receive insurance proceeds.
(b) Life insurance policy proceeds described by Subsection (a)
shall be paid to the trustee. The trustee shall hold and dispose
of the proceeds as provided by the trust agreement.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Amended by:
Acts 2009, 81st Leg., R.S., Ch.
672, Sec. 1, eff. September 1, 2009.
Sec. 1104.022. TRUSTEE NAMED AS BENEFICIARY IN WILL. (a) A
life insurance policy may provide that the beneficiary of the
policy be a trustee designated by will in accordance with the
policy provisions and the requirements of the insurance company.
(b) Except as provided by Subsection (c), on probate of a will
described by Subsection (a), the life insurance policy proceeds
shall be paid to the trustee. The trustee shall hold and dispose
of the proceeds as provided under the terms of the will as the
will existed on the date of the testator's death and in the same
manner as other testamentary trusts are administered.
(c) Except as otherwise provided by agreement with the insurance
company during the life of the insured, the insurance company
shall pay the life insurance policy proceeds to the executors,
administrators, or assigns of the insured if, during the 18-month
period beginning on the first day after the date of the insured's
death:
(1) a qualified trustee does not make to the insurance company a
claim to the proceeds; or
(2) the insurance company is provided satisfactory evidence
showing that there is or will be no trustee to receive the
proceeds.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1104.023. DEBTS; INHERITANCE TAX. Life insurance policy
proceeds received by a trustee under this subchapter are not
subject to debts of the insured or to inheritance tax to any
greater extent than if the proceeds were payable to a beneficiary
other than the executor or administrator of the insured's estate.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1104.024. COMMINGLING. Life insurance policy proceeds
received by a trustee under this subchapter may be commingled
with any other assets properly coming into the trust.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1104.025. CERTAIN PRIOR BENEFICIARY DESIGNATIONS NOT
AFFECTED. This subchapter does not affect the validity of a life
insurance policy beneficiary designation made before July 1,
1967, that names as beneficiary a trustee of a trust established
by will.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.