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TEXAS STATUTES AND CODES

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.

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