Not legal advice. We paraphrased these Tennessee statutes from the official Tennessee Code Annotated (in a version current through the 2026 regular session and the 2026 second extraordinary session) and the claims rule from the Secretary of State's official rules publication, checked against a current text of the official compilation.
What is different in Tennessee
Tennessee’s main lever is a statutory bad-faith penalty. After a formal demand, an insurer that lets 60 days pass and is found to have refused in bad faith can owe up to 25% more than the loss. Tennessee also has a claims rule with a section written only for life insurers, so the day counts for forms, investigation, payment and delay letters are specific to death claims.
Contest period
A life policy issued in Tennessee must state that it is the entire contract and that it becomes incontestable after being in force during the insured’s lifetime for a period set in the policy of no more than two years from its date. The only exceptions are nonpayment of premium and breaches of policy conditions on naval and military service in wartime (Tenn. Code Ann. 56-7-2307(3)). When the insured’s age was stated too low, the payout shrinks to the amount the premium would have purchased at the real age (56-7-2307(5)).
Outside industrial policies, the contract must also treat the insured’s answers, if not fraudulent, as representations rather than warranties, and an answer can void coverage only if it is in a written application whose copy was attached to or endorsed on the policy at issue (56-7-2307(4)).
Application misstatements
No written or oral misrepresentation or warranty made in negotiating or applying for a policy, by or for the insured, is treated as material or defeats the policy unless it was made with actual intent to deceive, or the matter misrepresented increases the risk of loss (Tenn. Code Ann. 56-7-103). Either route is enough for the insurer, so a beneficiary facing a rescission should ask which one the insurer relies on and what evidence it has.
Grace period and lapse
Once the first policy year is paid, each later premium carries one month of grace, during which coverage continues; the insurer may charge interest and may deduct the overdue premium from the payout if the insured dies during that month (56-7-2307(2)). A policy loan cannot void the policy unless the debt equals or exceeds the loan value and a month has passed since the insurer mailed notice to the insured and any assignee (56-7-2307(7)). A policy that has not been surrendered and cancelled may be reinstated within three years of default on satisfactory evidence of insurability and payment of back premiums with interest (56-7-2307(10)).
Lapse notice. For a life policy owned by a Tennessee resident, the insurer may not declare it lapsed within six months of a missed payment unless, on or before the due date and before the grace period starts, it mailed the owner (or the person designated to receive premium notices) a notice giving the amount due, where and to whom to pay, and that the policy will lapse if unpaid (56-7-2303(a)). A suit claiming a lapse was invalid for want of this notice must be filed within two years of the missed due date (56-7-2303(c)). The rule does not cover group or group-type policies, industrial policies, policies with premiums payable monthly or more often, or policies billed through an employer (56-7-2303(d)).
Claim deadlines for life insurers
The Department’s unfair claims settlement rule applies to insurers doing business in Tennessee, and one section of it, 0780-01-05-.11, applies only to life insurers (0780-01-05-.02). Days mean calendar days unless the rule says otherwise (.04(5)). A beneficiary is the person entitled to the policy proceeds, and a notice of claim can go to the insurer or its producer (.04(1), (12)). The chapter’s general acknowledgment rule, .07, and its other rules numbered .06 through .10 apply only to property and casualty insurers (.02), so for a death claim the life-specific deadlines are in .11. Under rule .11:
- Claim forms within 30 days. After due notice of a claim, the insurer must provide claim forms, instructions and reasonable help within 30 days (.11(1)).
- Start investigating within 30 days of receiving proof of loss (.11(2)).
- One notice for similar policies. Notice or proof of loss on one policy satisfies the insured’s obligation on similar policies with that insurer that the claimant identifies, though the insurer may ask for added information (.11(3)). Life insurers must also check the Social Security death master file and contact beneficiaries about potential claims, as the unclaimed-benefits statutes require (.11(3)).
- Pay within 30 days of affirming liability. The insurer must affirm or deny within a reasonable time and offer payment within 30 days after affirming liability when the amount is set and not disputed. If part is disputed, the undisputed part must be tendered within 30 days (.11(4)).
- Explain delays at 60 days. If the claim is unresolved 60 days after proof of loss, the insurer must give a reasonable explanation for the delay. If the investigation is still open, it must send a letter giving the reasons 60 days after first notice and every 60 days after that (.11(5)).
- Answer letters within 30 days on a pending claim (.11(6)).
- Written denial within 30 days of the decision, citing the policy provision, condition or exclusion relied on (.11(7)).
- No denial on undocumented calls. A denial may not rest on a phone call or interview that is not documented in the claim file (.11(8)).
- No “final” label on a check or letter unless the policy limit was paid or the claimant agreed to a compromise on coverage and amount (.11(9)).
- Complaint notice. If the insurer denies the whole claim and the claimant objects in writing, the insurer must tell the claimant in writing that a complaint may be filed with the Department (.11(11)).
The rule says it does not create or imply a private cause of action (0780-01-05-.01); penalties run through the Department under the Unfair Trade Practices and Unfair Claims Settlement Act (.13). A missed day count is still a fact worth putting in a complaint or a demand letter.
Interest
On a death claim under a life policy or annuity issued for delivery in Tennessee, the insurer must pay interest starting on the 15th day after the date of death, compounded annually, for up to three years from that date. The rate may not be less than what the insurer currently pays on proceeds left on deposit with it (Tenn. Code Ann. 56-7-315). The clock runs from the death, not from when the claim or the proof arrives. The bad-faith statute separately speaks of paying the loss “and interest thereon” (56-7-105(a)).
Settlement term. The policy must provide that a death claim is settled on receipt of due proof of death, or no later than two months after the proof arrives (56-7-2307(11)).
Bad-faith penalty
When a loss occurs and an insurer refuses to pay it within 60 days after the policyholder makes a demand, the insurer owes, in addition to the loss and interest, up to 25% of the liability for the loss. Two conditions must be shown to the court or jury: the refusal was not in good faith, and it caused the policyholder added expense, loss or injury, including attorney fees. Within the 25% cap, the amount is measured by that added expense, loss and injury (Tenn. Code Ann. 56-7-105(a)).
A separate rule applies to suits against an unauthorized foreign or alien insurer on a contract issued or delivered in Tennessee: if it fails to pay for 30 days after demand before suit, and the court finds the refusal vexatious and without reasonable cause, the court may award a reasonable attorney fee of up to 12.5% of the recovery, but not less than $25. Failing to defend the suit is prima facie evidence of that (56-7-105(b)).
The statute does not spell out what the demand must say.
Group life insurance
The claims rule covers claims under contracts or certificates of insurance issued to Tennessee residents (0780-01-05-.01), so its life insurer standards appear to reach group certificates too. Employer-provided coverage from a private employer is usually governed by ERISA too, with its own claim appeal, time limits and limits on damages; see employer group life.
Federal courts in Tennessee review ERISA accident claims closely even under the deferential standard. In Murchison v. Reliance Standard, the Western District reversed an AD&D denial after a fatal ATV crash because the insurer relied on toxicology alone and passed over its own reviewer’s finding that alcohol and drugs did not contribute to the death (order of April 23, 2020).
Deadline to sue
Tennessee’s catch-all statute gives six years from when the cause of action accrued for actions on contracts not otherwise expressly provided for (Tenn. Code Ann. 28-3-109(a)(3)). Many life policies set their own shorter deadline to sue, and such a clause binds the beneficiary only to the extent Tennessee law allows it. Check the suit-time clause in the policy too.
When the beneficiary caused the death
Tennessee’s slayer statute strips estate benefits from anyone who feloniously and intentionally kills the decedent, a phrase that includes conspiring to kill or to procure the killing. The killing also revokes any revocable transfer to the killer in a governing instrument the decedent signed, which by the statute’s definitions includes a beneficiary designation; the instrument is then read as if the killer had disclaimed (Tenn. Code Ann. 31-1-106(a)–(c), (e)). A conviction is conclusive evidence of who the killer was (31-1-106(g)).
Insurer protection. Until the company gets written notice that someone claims a forfeiture, it is protected if it pays the designated beneficiary in good-faith reliance on the designation. The notice has to reach its main office by registered or certified mail with a return receipt, or by formal service in the manner of a civil summons. After notice, the insurer may deposit the funds with the probate court handling the estate (or, if none is open, the probate court of the decedent’s county of residence), which discharges it (31-1-106(h)). A family member who suspects the named beneficiary may want that notice sent before the insurer pays.
Worked example
A beneficiary notifies a life insurer of a death on January 5, 2026. The insurer should send claim forms and instructions by February 4. The completed proof of loss arrives February 10, so the insurer should begin any investigation by March 12. If the claim is still unresolved on April 11, 60 days after proof of loss, the insurer owes the beneficiary a reasonable explanation for the delay. If the insurer then denies the claim, its written denial, naming the policy term it relies on, should go out within 30 days of that decision. If the insured died December 28, 2025, interest on the benefit runs from January 12, 2026, the 15th day after death (56-7-315). Separately, if the beneficiary’s lawyer sends a formal demand on May 1 and the insurer has not paid by June 30, a court that finds the refusal was not in good faith may add up to 25% of the benefit.
Making a complaint
The Tennessee Department of Commerce and Insurance takes complaints about insurers, including wrongly denied claims, for policies written in Tennessee: File an Insurance Complaint (TDCI). Filing one leaves every deadline to sue running.
Sources
- Tennessee Code Annotated 28-3-109, 31-1-106, 56-7-103, 56-7-105, 56-7-315, 56-7-2303 and 56-7-2307, read from a current text of the official code (through the 2026 regular session and the 2026 second extraordinary session). No link: the state’s online code is on a paid commercial service.
- Tenn. Comp. R. & Regs. chapter 0780-01-05, Unfair Claims Settlement Practices (Secretary of State official rules publication, effective October 9, 2017): publications.tnsosfiles.com. All sixteen rules (.01 to .16) were also compared with a current text of the official compilation (through September 30, 2026); the wording matched.
- Tennessee Department of Commerce and Insurance, File an Insurance Complaint: tn.gov.
- Murchison v. Reliance Standard Life Ins. Co., No. 1:19-cv-01028-JDB-jay (W.D. Tenn. Apr. 23, 2020) (official text, GovInfo): govinfo.gov.
Not legal advice. This page summarizes general rules and the specific statutes cited. Your policy's wording, the state whose law applies, and whether the coverage came through an employer can all change the result. See the disclaimer and editorial policy.