Free Life Policy Provisions Options and Riders Study Guide
Tennessee Life, Accident & Health exam — Life Policy Provisions Options and Riders.
Tennessee lists the required provisions for individual life policies in Tenn. Code Ann. 56-7-2307, the prohibited and permitted limits in 56-7-2308, and group life rules in 56-7-2305. The national guide explains the provisions, nonforfeiture options and riders in general. This guide gives Tennessee's versions.
No general life free look
- Tennessee has no statutory 10-day free look for every life policy.
- A replacement policy carries a 20-day unconditional refund right from delivery (Rule 0780-01-24-.07).
- An insurer may deliver the Buyer's Guide and Policy Summary with the policy only if the policy has an unconditional refund right of at least 10 days (Rule 0780-01-40-.04).
Required provisions (56-7-2307)
| Provision | Tennessee rule |
|---|---|
| Grace period | One month for premiums after the first year. Coverage continues. If the insured dies during the grace period, the unpaid premium is deducted. |
| Incontestability | The policy becomes incontestable within 2 years of its date, except for nonpayment of premium and certain wartime military-service provisions. |
| Entire contract; representations | Application statements are representations, not warranties. A statement can void the policy only if it's in a written application attached to the policy. |
| Misstatement of age | The benefit is what the premium would buy at the true age. |
| Dividends | Participating policies share in surplus annually, starting no later than the end of the third policy year. Options include cash, premium reduction, paid-up additions or accumulation at interest. |
| Policy loans | Available after 3 full years' premiums, except on term. An unpaid loan voids the policy only when the debt reaches the loan value, and not until one month after notice is mailed. The insurer may defer a loan up to 6 months, except a loan to pay premiums (56-7-2309). |
| Nonforfeiture table | Shows values for at least the first 20 policy years. |
| Reinstatement | Within 3 years of default, with proof of insurability and payment of arrears with interest. |
| Death claims | Settled on due proof of death, and no later than two months after the proof is received. |
Limits and exclusions (56-7-2308)
Permitted exclusions
- Suicide, sane or insane, within 2 years of issue. The insurer returns the premiums instead of paying the face amount.
- Death from military, naval or air service in time of war.
- Aviation, except travel as a fare-paying passenger on a regularly scheduled airline.
- A hazardous occupation, but only for deaths within 2 years of issue.
Prohibited provisions
- Limiting the time to sue to less than 5 years after the cause of action accrues.
- Backdating more than 6 months before the application to get a lower premium.
Lapse notice (56-7-2303)
- Before an individual life policy lapses, the insurer mails a notice stating the amount due, where to pay and that the policy will lapse.
- Excluded: group, industrial, employer-billed, and monthly-or-more-frequent premium policies.
Group life (56-7-2305)
| Provision | Tennessee rule |
|---|---|
| Grace period | 31 days. The policyholder may owe a pro rata premium for that time. |
| Incontestability | 2 years, except for nonpayment. |
| Facility of payment | Up to $500 to someone who appears to have paid funeral or last-illness expenses. |
| Certificates | Each insured gets a certificate describing the coverage, beneficiary and conversion rights. |
| Conversion | An individual policy without proof of insurability, if the person applies and pays within 31 days after coverage ends. |
| Death during conversion period | The convertible amount is paid as a group claim. |
| Group policy terminates | Members insured 5 years may convert up to the lesser of the amount that ended or $2,000. |
| Late notice of conversion | The period is extended to 15 days after notice is given, but no more than 60 days past the original period. |
Common exam traps
- Tennessee has no general life free look. A replacement gets 20 days.
- The grace period is one month for individual life and 31 days for group life.
- The only incontestability exceptions are nonpayment (and wartime military service). There's no fraud exception.
- Suicide exclusion: 2 years, with a refund of premiums.
- Time to sue: no less than 5 years. Backdating: no more than 6 months.
- Group conversion when the group policy ends is capped at $2,000.
Practice Life Policy Provisions Options and Riders questions All Life, Accident & Health topics
Practice questions are study aids generated for exam preparation and are not actual exam questions. Content is provided for educational purposes and is not legal advice. Verify current statutes, rules, and exam specifications with the Insurance Department and the exam administrator before relying on it.
