Every individual accident and health policy delivered in Texas must contain a set of mandatory (uniform) provisions in the words prescribed by law, or in language the commissioner finds at least as favorable to the insured. The insurer may reword or reorder them, but it may never make them less favorable than the statutory text (Tex. Ins. Code ch. 1201). Four of these show up on nearly every exam: entire contract, incontestability (time limit on certain defenses), grace period, and reinstatement.
Think of them as a timeline: the contract is formed, it can be contested for a limited window, premiums have a cushion if they are late, and a lapsed policy has a defined path back to life.
Where entire contract, incontestability, grace period, and reinstatement each apply along a policy's timeline.
Entire contract; changes
The policy, together with the application if a copy of the application is attached, constitutes the entire contract between the parties. Nothing outside those four corners counts: not a brochure, not an illustration, not an oral promise made at the kitchen table.
Two consequences follow, and both are heavily tested:
No change is valid unless it is approved by an executive officer of the insurer and the approval is endorsed on or attached to the policy.
No agent or producer may change the policy or waive any of its provisions. A producer's promise cannot bind the company.
Because a copy of the application must be attached for its statements to be used against the insured, an insurer that fails to attach it generally cannot rely on application answers to contest a claim.
Incontestability / time limit on certain defenses
This provision limits how long an insurer may look backward. After the policy has been in force for the period stated in the provision (the standard individual health contestable window is commonly two years) during the insured's lifetime, the insurer may not use misstatements in the application — other than fraudulent misstatements, where the law permits that carve-out — to void the policy or to deny a claim for a loss incurred after that period.
The same clock also protects the insured against pre-existing condition denials: a claim for a loss beginning after the stated period cannot be reduced or denied on the ground that a condition not excluded by name or specific description existed before the effective date.
Practical read: during the contestable window, the insurer can rescind for material misrepresentation. After it, only fraud (where allowed) survives — and a condition the insurer never excluded by name is no longer a defense.
Grace period
After the first premium, the insured gets a grace period — a stated number of days after the due date during which the premium may still be paid and the policy stays in force. The length is keyed to the premium mode; the customary tiers are shorter for weekly and monthly premium policies and longest (about a month) for policies paid quarterly, semiannually, or annually.
Key points: coverage continues during the grace period, so a claim arising in that window is payable (the insurer may deduct the unpaid premium). If the premium is still unpaid when the grace period ends, the policy lapses.
Reinstatement
A lapsed policy is not necessarily gone. The uniform reinstatement provision works like this:
If the insurer or an agent authorized to accept premium simply accepts the late premium without requiring an application, the policy is reinstated at that moment.
If a reinstatement application is required, the insurer gives a conditional receipt for the premium. The policy is reinstated when the insurer approves the application, or automatically if the insurer has not previously notified the insured in writing of disapproval within the period stated in the provision (commonly 45 days after the conditional receipt date).
The reinstated policy covers accidental injury from the date of reinstatement and sickness that begins more than ten days after that date — a short waiting window that discourages a person from reinstating only after symptoms appear.
Premiums collected on reinstatement may be applied only to a period for which premium has not already been paid, and generally not to any period more than 60 days before the reinstatement date. The insurer and insured retain all other rights under the policy, subject to any endorsement attached at reinstatement.
Study tip: entire contract answers what the deal is, incontestability answers how long the insurer can attack it, grace period answers what happens when payment is late, and reinstatement answers how a lapsed policy comes back (Tex. Ins. Code Title 8; Tex. Ins. Code ch. 1201).
Sample questions
An insured asks her producer to change the benefit schedule on her individual Texas health policy. Under the mandatory entire contract provision, how may a valid change be made?
The producer may make the change in writing and initial it on the policy face
Any licensed employee of the insurer may authorize the change orally to the insured
Only an executive officer of the insurer may approve it, and the approval must be endorsed on or attached to the policy
The insured may make the change by attaching a signed request to her copy of the policy
A Texas individual health policy has been in force during the insured's lifetime for longer than the period stated in its time limit on certain defenses provision. What may the insurer still use to void the policy or deny a claim for a later loss?
Any material misstatement in the application, whether innocent or intentional
Fraudulent misstatements in the application, where the law permits that exception
Any pre-existing condition, whether or not it was excluded by name
Nothing at all; the policy becomes absolutely unchallengeable
An insured's renewal premium is due March 1 and is not paid. On March 12, still within the policy's grace period, he is hospitalized. What is the insurer's obligation?
The claim is payable because the policy remains in force during the grace period; the insurer may deduct the unpaid premium
The claim is denied because coverage ended on the March 1 due date
The claim is payable only if the insured pays the overdue premium before discharge from the hospital
The claim is held until the insurer decides whether to reinstate the lapsed policy
A policy is reinstated on June 1. The insured develops a sickness with symptoms first appearing on June 6 and is diagnosed on June 15. Under the uniform reinstatement provision, how is this treated?
Covered, because reinstatement restores sickness coverage immediately
Covered, because the diagnosis occurred more than ten days after reinstatement
Covered only if the insurer's reinstatement application asked no health questions
Not covered, because the sickness began within ten days after the date of reinstatement
An insurer requires a reinstatement application and issues a conditional receipt for the late premium. The insurer never notifies the insured in writing that the application is disapproved. Under the uniform reinstatement provision, what happens?
The premium must be refunded and the policy stays lapsed
The policy can never be reinstated without a signed approval from the insurer
The policy is reinstated automatically once the period stated in the provision (commonly 45 days from the conditional receipt date) passes with no written disapproval
The insured must reapply, and coverage begins only on the date of a new application
An insurer delivered an individual health policy but did not attach a copy of the application. Eight months later it wants to rescind based on an answer the applicant gave about prior treatment. What is the likely result?
The insurer may rescind, because the contestable period has not expired
The insurer may rescind, because oral statements to the producer are part of the contract
The insurer may rescind only if the producer testifies to the applicant's answers
The insurer generally cannot rely on the application answers, because the application is part of the entire contract only if a copy is attached
When an insurer accepts premium to reinstate a lapsed individual health policy, that premium may be applied to which period?
Only a period for which premium has not already been paid, and generally not to any period more than 60 days before the reinstatement date
Any period the insurer chooses, including periods already paid
Any past period, without limit, back to the original policy date
Only the 10 days immediately following the reinstatement date
An insured's health policy has been in force well beyond the period stated in its time limit on certain defenses provision. She files a claim for a condition that existed before the effective date but was never named or specifically described as an exclusion in the policy. How must the insurer handle it?
Deny the claim, because pre-existing conditions are never covered
Pay the claim; after the stated period the insurer may not reduce or deny it on the ground that the condition existed before the effective date
Pay the claim only after the insured completes a new application and a new waiting period
Reduce the claim proportionately to reflect the pre-existing condition
During the application interview, a producer tells an applicant, "Don't worry about that waiting period — I'll waive it for you." Under the mandatory entire contract provision in a Texas individual accident and health policy, what is the effect of that statement?
The waiver is binding because a producer acts as the agent of the insurer at the point of sale.
The waiver is binding if the producer writes the change on the application before submitting it.
The waiver becomes binding once the insurer's claims examiner reviews the file and pays a claim.
The waiver has no effect: no change is valid unless approved by an executive officer of the insurer and endorsed on or attached to the policy, and no producer may change the policy or waive any of its provisions.
Under the mandatory entire contract provision, what documents make up the entire contract between the insurer and the insured?
The policy only, because the application is merely an underwriting worksheet.
The policy together with the application, if a copy of the application is attached to the policy.
The policy, the application, and any sales brochure or benefit illustration given to the applicant.
The policy, the application, and any oral representations made by the producer during the sale.
Which statement best describes the effect of the mandatory incontestability (time limit on certain defenses) provision?
After the policy has been in force for the period stated in the provision during the insured's lifetime, the insurer may not use misstatements in the application — other than fraudulent misstatements, where the law allows that carve-out — to void the policy or deny a claim for a loss incurred after that period.
The insurer may void the policy for any material misstatement in the application at any time during the life of the policy.
The time limit begins to run on the date a claim is filed rather than from the date the policy takes effect.
After the stated period the insurer may no longer cancel the policy for nonpayment of premium.
A monthly-premium individual health policy's premium is due on the 1st. The insured does not pay, and on the 8th — still within the policy's grace period — she is hospitalized. The premium is never paid. How is the claim treated?
The claim is denied, because the policy lapsed automatically at the end of the day the premium was due.
The claim is payable, because the policy remains in force during the grace period; the insurer may deduct the unpaid premium from the benefits.
The claim is payable only if the overdue premium is received before the loss occurs.
The claim is payable in full and the insurer must waive the overdue premium as a condition of paying it.
A lapsed individual health policy is reinstated on June 1. Which statement correctly describes what the reinstated policy covers?
It covers sickness from June 1 and accidental injury beginning more than ten days after June 1.
It covers both accidental injury and sickness from June 1, with no waiting period.
It covers accidental injury from June 1 and sickness that begins more than ten days after June 1.
It covers neither accidental injury nor sickness until 30 days after June 1.
An insured applies for reinstatement of a lapsed health policy and pays the premium; the insurer issues a conditional receipt. The insurer neither approves the application nor sends any written notice of disapproval. Under the mandatory reinstatement provision, what happens?
Nothing — the policy is reinstated only if and when the insurer mails a written approval.
The policy is reinstated automatically ten days after the date of the conditional receipt.
The premium must be refunded and a new policy applied for after 30 days.
The policy is reinstated automatically if the insurer has not previously notified the insured in writing of its disapproval within the period stated in the provision — commonly the 45th day following the date of the conditional receipt.
How may premium collected in connection with a reinstatement be applied under the mandatory reinstatement provision?
To any past period the insurer chooses, with no limit on how far back it reaches.
Only to periods beginning on or after the reinstatement date, never to any past period.
Only to a period for which premium has not already been paid, and generally not to any period more than 60 days before the reinstatement date.
To any unpaid period within the 12 months preceding the reinstatement date.
An individual health policy has been in force for three years, well past the period stated in its time limit on certain defenses provision. The insured is treated for a back condition that first appeared before the effective date but was never excluded by name or specific description in the policy. What is the insurer's position?
The claim must be paid: for a loss beginning after the stated period, coverage may not be reduced or denied on the ground that a condition not excluded by name or specific description existed before the effective date.
The insurer may deny the claim because the condition existed before the policy's effective date.
The insurer may rescind the policy, because pre-existing conditions are excluded from every individual health policy by law.
The insurer may deny the claim unless the insured proves she was unaware of the condition when she applied.
A Texas individual health policy contains the standard entire contract provision. Which statement about changing that policy is accurate?
A change is valid only if an executive officer of the insurer approves it and the approval is endorsed on or attached to the policy.
Any licensed producer of the insurer may amend the policy in writing at the applicant's request.
The insured may waive a policy provision orally if the producer witnesses the waiver.
A change becomes valid 30 days after the insurer's home office receives written notice of it.
An insurer issues an individual health policy in Texas but does not attach a copy of the completed application to the policy. Two months later it wants to deny a claim based on an answer the applicant gave on that application. What is the likely result?
The denial is permitted because the applicant signed the application regardless of whether it was attached.
The insurer generally may not rely on the application statements, because the application is part of the entire contract only if a copy is attached to the policy.
The denial is permitted because the contestable period has not yet expired.
The insurer may deny the claim only if it first refunds all premiums paid.
An individual health policy has been in force beyond the period stated in its time limit on certain defenses (incontestability) provision, and the insured is living. Which defense is the insurer generally still permitted to raise, where the law allows the carve-out?
An innocent but material misstatement of the insured's age on the application
A pre-existing condition that the policy never excluded by name or specific description
An unintentional omission of a past physician visit on the application
A fraudulent misstatement made in the application
An insured's renewal premium is due March 1 and is not paid. On March 12, still inside the policy's grace period, the insured is hospitalized. What is the insurer's obligation?
The policy was in force during the grace period, so the claim is payable and the insurer may deduct the unpaid premium.
The claim is denied because coverage was suspended the moment the premium became overdue.
The claim is payable only if the insured pays the overdue premium before being admitted.
The claim is held and paid only if the insurer later approves a reinstatement application.
A policy lapses, and the insurer requires a reinstatement application and issues a conditional receipt for the premium. Under the uniform reinstatement provision, when is the policy reinstated automatically?
Immediately upon issuance of the conditional receipt, regardless of the application
If the insurer has not previously notified the insured in writing of disapproval within the period stated in the provision, commonly 45 days after the conditional receipt date
Ten days after the conditional receipt date, whether or not the insurer acts
Sixty days after the conditional receipt date, but only if the insured passes a medical exam
A policy is reinstated on June 1. The insured breaks an ankle on June 4 and, separately, is diagnosed on June 8 with a sickness that began June 6. How does the reinstated policy respond?
Neither loss is covered; a reinstated policy has a 30-day waiting period for all losses.
Both losses are covered, because reinstatement restores the policy retroactively to the original date of issue.
The broken ankle is covered because accidental injury is covered from the date of reinstatement; the sickness is not, because it began within ten days after reinstatement.
The sickness is covered but the broken ankle is not, because injuries require a new incontestable period to run.
An insured reinstates a lapsed health policy. Under the uniform reinstatement provision, how may the insurer apply the premium it accepts at reinstatement?
To any past period the insurer chooses, without limitation, until the policy is fully paid up
Only to periods after the reinstatement date; no premium may be applied to any prior period
To all periods since the original date of issue, with interest charged on each
Only to a period for which premium has not already been paid, and generally not to any period more than 60 days before the reinstatement date
An insured files a claim for treatment of a heart condition that first appeared before the policy's effective date. The policy has been in force longer than the period stated in its time limit on certain defenses provision, the loss began after that period, and the condition was never listed as an exclusion by name or specific description. What is the correct analysis?
The insurer may deny the claim, because pre-existing conditions are never covered under individual health policies.
The insurer may reduce, but not deny, the claim by the proportion attributable to the pre-existing condition.
The insurer may not reduce or deny the claim on the ground that the condition existed before the effective date.
The insurer may deny the claim only if it can also show the insured committed fraud on the application.
Under the mandatory "entire contract" provision of an individual Texas accident and health policy, what documents make up the entire contract between the parties?
The policy together with the application, if a copy of the application is attached to the policy
The policy, the application, and any sales brochure or illustration given to the applicant
The policy alone, because the application is only an underwriting worksheet
The policy, the application, and any oral representations made by the producer at the point of sale
A policyowner asks her producer to add an extra benefit to her individual health policy. The producer signs a note agreeing to the change and gives it to her. What is the effect of that note?
It changes the policy, because a producer acts as the insurer's agent when collecting premium
It has no effect; a change is valid only if approved by an executive officer of the insurer and endorsed on or attached to the policy
It changes the policy for 45 days, after which the insurer must ratify it in writing
It changes the policy once the policyowner pays any additional premium the producer quoted
An individual health policy has been in force beyond the period stated in its time limit on certain defenses provision, and the insured is alive. Which statement best describes the insurer's remaining ability to rely on statements in the application?
The insurer may still void the policy for any material misstatement, since materiality is judged at issue
The insurer may still deny claims based on the application but may not rescind the policy
The insurer may not use misstatements in the application, other than fraudulent misstatements where the law permits that carve-out, to void the policy or deny a claim for a loss incurred after that period
The insurer loses all defenses, including fraud, once the stated period has run
An insured's quarterly premium was due March 1 and was not paid. On March 12, still within the grace period, the insured is hospitalized. What is the insurer's obligation?
Deny the claim, because coverage is suspended until the overdue premium is received
Deny the claim, but refund any premium later tendered for the unpaid period
Pay the claim, because the policy continues in force during the grace period; the insurer may deduct the unpaid premium
Pay the claim only if the insured pays the overdue premium before the hospital submits the bill
A lapsed individual health policy owner submits a reinstatement application and receives a conditional receipt for the premium. The insurer never sends written notice of disapproval. Under the uniform reinstatement provision, what happens?
The policy is reinstated automatically once the period stated in the provision (commonly 45 days after the conditional receipt date) passes without written notice of disapproval
The policy remains lapsed until the insurer sends a written approval
The premium must be refunded and a new policy applied for
The policy is reinstated only if the insured is examined by a physician the insurer designates
A policy is reinstated on June 1. On June 6 the insured breaks an ankle in a fall, and on June 8 the insured is diagnosed with a sickness that began June 7. How does the reinstated policy respond?
Both losses are covered, because reinstatement restores coverage retroactively to the original effective date
The broken ankle is covered because accidental injury is covered from the date of reinstatement, but the sickness is not, because only sickness beginning more than ten days after reinstatement is covered
Neither loss is covered, because a ten-day waiting period applies to both accident and sickness
The sickness is covered but the injury is not, because injuries require a new underwriting decision
When an insurer collects premium in connection with reinstating a lapsed individual health policy, how may that premium be applied?
To any past period the insurer chooses, including periods for which premium was already paid
Only to future premium periods beginning on the reinstatement date, with no credit for past due amounts
To the entire lapse period, however long it lasted, so the policy is treated as never having lapsed
Only to a period for which premium has not already been paid, and generally not to any period more than 60 days before the reinstatement date
Three years into an individual health policy, an insured files a claim for a heart condition. The insurer discovers the condition existed before the effective date but was never excluded by name or specific description in the policy, and the insurer never attached a copy of the application to the policy. Which analysis is best supported by the mandatory provisions?
The insurer may deny the claim, because pre-existing conditions are never covered regardless of policy language
The insurer may deny the claim by relying on the answers the insured gave in the application, since the application is always part of the contract
The insurer may rescind the policy, because the time limit on certain defenses applies only to claims, not to rescission
The insurer must pay: the loss began after the period stated in the time limit on certain defenses and the condition was not excluded by name or specific description, and the unattached application cannot be used against the insured
Under the uniform "entire contract; changes" provision required in Texas individual accident and health policies, who may make a valid change to the policy?
Any licensed producer who solicited and countersigned the application
The insured, by mailing a written request to the insurer's home office
The underwriter who reviewed the file, by oral authorization to the producer
An executive officer of the insurer, whose approval is endorsed on or attached to the policy
While delivering a health policy, a producer tells the insured, "The policy language excludes this treatment, but the company always pays it anyway — you're covered." The insurer later denies a claim for that treatment. What is the effect of the producer's statement?
It binds the insurer, because the producer was acting within apparent authority at delivery
It is enforceable if the insured can prove the statement was made before the policy was delivered
It has no effect: the policy and the attached application are the entire contract, and no agent may change the policy or waive any of its provisions
It becomes part of the contract once the insurer accepts the first premium
An insured pays health premiums quarterly and misses a due date. Twelve days later — still inside the policy's grace period — she is hospitalized. She pays the overdue premium before the grace period ends. How is the claim treated?
It is payable, because the policy remained in force during the grace period; the insurer may deduct the unpaid premium from the benefit
It is denied, because coverage terminated on the premium due date
It is payable only after the insurer approves a reinstatement application
It is payable in full, and the insurer must waive the overdue premium as a condition of paying
Under the uniform reinstatement provision, what does the reinstated accident and health policy cover?
Accidental injury and sickness, both from the date of reinstatement
Accidental injury from the date of reinstatement and sickness beginning more than 30 days after that date
Neither accident nor sickness until the next regular premium due date
Accidental injury from the date of reinstatement and sickness that begins more than ten days after that date
Three years after the effective date of an individual health policy, an insured files a claim for treatment of a back condition that existed before the policy was issued. The policy contains no rider or provision excluding that condition by name or specific description. Applying the time limit on certain defenses, what may the insurer do?
Deny the claim, because losses from pre-existing conditions are never covered
Neither reduce nor deny the claim on the ground that the condition pre-existed, because the loss began after the period stated in the provision and the condition was never excluded by name
Deny the claim if it can show the insured knew about the condition when applying
Rescind the policy back to its original effective date and refund premiums
A lapsed policyholder submits a reinstatement application with the overdue premium, and the insurer's agent issues a conditional receipt. The insurer neither approves the application nor sends any written notice of disapproval. What happens?
The policy can never be reinstated without the insurer's written approval
The policy was reinstated the moment the conditional receipt was issued
The policy is reinstated automatically, because the insurer did not previously notify the insured in writing of its disapproval within the period stated in the provision (commonly the forty-fifth day after the conditional receipt date)
The premium must be refunded and a new policy applied for
Four years after issue, an insurer discovers that the insured's application understated a prior medical condition. The misstatement was material but not fraudulent. The insured now files a claim for a loss that began last month. Under the time limit on certain defenses, what is the insurer's position?
It may rescind the policy, because any material misstatement voids coverage regardless of when it is discovered
It may not use the misstatement to void the policy or deny the claim, because the loss was incurred after the stated period and the misstatement was not fraudulent
It may pay the claim but must cancel the policy going forward for misrepresentation
It may void the policy as long as it refunds all premiums paid
Under the uniform reinstatement provision, how may premium collected in connection with a reinstatement be applied?
Only to a period for which premium has not already been paid, and generally not to any period more than 60 days before the reinstatement date
To all unpaid periods reaching back to the policy's original date of issue
To a period beginning exactly 45 days before the reinstatement date
To any past period the insurer selects, up to 12 months of back premium
