Life insurance in Texas

Texas is a community property state, and that one fact shapes life insurance more than any other rule here: who owns a policy, and who has a claim to its proceeds, can depend on when and with what money it was bought. Texas also has firm prompt-payment rules for claims and no estate tax.

How your policy is protected if an insurer fails

The Texas Life and Health Insurance Guaranty Association is a nonprofit created by the Texas Legislature in 1973 under what is now Chapter 463 of the Texas Insurance Code. It protects Texas residents when a licensed life, health or annuity insurer is found insolvent and ordered liquidated, continuing most in-force policies and paying claims. The limits below are from the association's FAQ, as checked on October 4, 2026.

Limits are applied per insured life or owner, not per policy, and separately for each failed company: if you own several policies with one insolvent insurer, their benefits are added together before the limit applies. Coverage is set by Texas law on the liquidation date, and only people living in Texas on that date are covered by this association. A retained asset account holding a death benefit is covered like any other death benefit. Not covered: insurers not licensed in Texas, non-guaranteed or policyholder-risk portions of variable and indexed products, interest above a statutory average rate, self-insured employer plans, fraternal benefit certificates and certain charitable gift annuities. Amounts above the limits can be filed as claims against the failed company's estate.

The association's site posts notices for recent cases, including Bankers Life Insurance Company and Colorado Bankers Life. Guaranty coverage is a backstop, not a reason to choose a weak insurer. The association is a separate nonprofit whose members are the licensed insurers, not a state agency, and Texas law prohibits agents from using its coverage as an inducement to buy insurance. Keep paying premiums if your company is in receivership. More in state life and health guaranty associations and what happens if your life insurance company fails.

Who regulates life insurance in Texas

The Texas Department of Insurance (TDI) licenses insurers and agents, approves policy forms, monitors company finances and runs a consumer help line and complaint process. Agents who sell variable life insurance in Texas need both a federal securities license and a state insurance license, according to TDI.

Free look, grace periods and policy rules

• Free look: according to TDI's life insurance guide, Texas policies have a free-look period of at least 10 to 20 days, during which you can cancel for any reason and get a full refund. The exact period is printed on your policy. See the free-look period: returning a policy for a refund.
• Grace period: TDI says most policies have a 31-day grace period after the premium due date, with no interest charged and coverage still in force. If the insured dies during it, the beneficiary receives the death benefit minus the premium owed.
• Claim payment: insurers must pay a death benefit within two months after getting proof of death and verifying the beneficiary, and for individual policies must add interest from the time proof of death was received. Payment can take longer if the insured died during the contestable period. Texas's prompt-payment law, Insurance Code chapter 542, adds damages of 18% a year on claims delayed more than 60 days, and insurers facing competing claims may file an interpleader in court within 90 days. See interest on late life insurance claims.

Taxes, estates and community property

Texas has no estate tax and no inheritance tax; only the federal estate tax applies, with a $15,000,000 per-person exclusion in 2026, according to the IRS.

Texas is a community property state, one of nine listed in IRS Publication 555. Property acquired during a marriage is generally owned equally by both spouses, and a policy bought during the marriage with community funds is generally community property, whoever is named as owner. That can matter when one spouse names someone other than the other spouse as beneficiary, and at divorce. Before you set up ownership or beneficiaries on a large policy, read community property states and life insurance and talk with a Texas estate or family lawyer. See also state estate and inheritance taxes and life insurance.

Finding a lost policy or unclaimed benefits

TDI points consumers to the NAIC Life Insurance Policy Locator, which asks participating insurers to search their records for a deceased person's policies; how to find a lost life insurance policy covers the other steps. Benefits an insurer cannot deliver are eventually reported to the Texas Comptroller, whose official unclaimed property site is ClaimItTexas.gov. If the insured lived in Oklahoma, New Mexico, Arkansas or Louisiana, search there too. More in unclaimed life insurance money and state unclaimed property.

Life insurers based in Texas

Texas is home to several large life insurers. Globe Life is headquartered in McKinney, and its American Income Life subsidiary in Waco. USAA Life Insurance Company is part of San Antonio-based USAA. American National was founded in Galveston and is now owned by Brookfield Wealth Solutions. American-Amicable includes Waco's American-Amicable Life Insurance Company of Texas, and Prosperity Life Group owns Austin-based National Western Life.

Where to get help

• Texas Department of Insurance: Consumer Help Line 800-252-3439; 1601 Congress Avenue, Austin, TX 78701; mail to P.O. Box 12030, Austin, TX 78711; tdi.texas.gov.
• Complaints: ask the insurer for a written explanation first. If that does not resolve it, file online through TDI's complaint page or call the help line. Our guide to how to file a complaint against a life insurer explains what to include.
• Guaranty association: Texas Life and Health Insurance Guaranty Association, 1717 West 6th Street, Suite 230, Austin, TX 78703, 512-476-5101 or toll-free 800-982-6362, txlifega.org.