Law Blog

There is first and third party insurance. Life insurance is 1st party. Health insurance too. In Texas, the application of the policy may or may not be the contract. Sometimes the application and policy equals a contract. Other times just the policy is enough. Section 705.103 says both must be present “life insurance policy must be accompanies by application”. Page 631 – “a life insurance policy must be accompanied by a copy of the applications along with questions and answer” – 205.103. Article 1101.003 states a life insurance policy must provide that the policy or it must provide that the policy and the application constitute the contract. Two questions involve binder and conditional receipt. What is a binder or a conditional receipt? Agent takes policy and gives her a binder. The elements of a contract are: offer and acceptance, meeting of the minds, mutuality, and, intent.

Another name for binder is conditional receipt. If it is a conditional receipt. A binder in Texas creates temporary insurance. Even though they haven’t investigated and there is no promise to insure Mary. This binder is called a legal fiction. If you give someone an application and that person completes the app and that person gives you the first premium, in Texas, we have temporary insurance. These fall under personal injury because the applicant of either fraud or bad faith or malice.

When you buy 100 shares of stock in ford, it has a specific value that can go up and down. When you the testator bought 100 shares you paid 100k. When you die that stock will be worth some other value. The value is immaterial if you give the stock. But ford also pays cash dividends – payable out of profit of organization. They’re like interest so that any cash dividend paid during the life of the testator goes to the general estate. Does not go with the stock even if it’s paid after the death of the testator. But any cash dividend declared and paid goes to the devisee.

Stock dividends only gives you more shares to show your value. Ford might have decided to issue a stock divided 1:1. Every share you have gets another. Stock dividends do not increase in value. Stock splits. Corporate devise which increase the number of shares but do not decrease the value or could be reverse split. The general rule is dividends and splits do not change any value. Therefore any such devise before the death of the testator so that it will go to the devisee of the original amount of shares. Merger also does not change the value of your bequest. Merely a change in the book keeping does not change your bequest. Problem: whether or not devise of stock is specific or general. If specific, it takes with it the aforementioned wills. If general, a general devise of stock is considered stock. If general and there’s no stock in the case you get value. If specific, you get nothing.