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HB 59

Insurance, Life - As introduced, for life insurance policies issued, amended, or renewed on or after July 1, 2025, prohibits the issuer of the policy from collecting premiums from the policy holder once the policy holder has made premium payments, in the aggregate, equal to the amount of coverage under the life insurance policy. - Amends TCA Title 56.

114th Regular Session (2025-2026) Introduced by Yusuf Hakeem

Bill prohibits life insurers from collecting premiums after cumulative payments equal policy face value, potentially making life insurance unsustainable and unavailable in Tennessee.

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#insurance #life
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WeVote Research Nonpartisan
Bill Summary · HB 59

Legislative bill overview

HB 59 would prohibit life insurance companies from collecting premiums from policyholders once their cumulative premium payments equal the policy's face value (coverage amount). The prohibition would apply to policies issued, amended, or renewed on or after July 1, 2025, and would amend Tennessee's insurance code (TCA Title 56).

Why is this important

Life insurance fundamentally relies on sustained premium payments throughout a policy's term to remain in force and generate claims-paying reserves. This bill would fundamentally restructure how life insurance operates, potentially making policies unaffordable for insurers to maintain and creating unpredictable financial obligations for insurance companies. The practical effect could be reduced availability or significantly higher initial premiums for Tennessee consumers.

Potential points of contention

  • Actuarial soundness: Life insurers calculate premiums based on mortality risk, investment returns, and administrative costs spread over the policy's entire term—typically 20-40+ years. Eliminating premiums after breakeven would create massive unfunded liabilities and make policies mathematically unsustainable.
  • Market viability: Insurance companies may withdraw from Tennessee's market or dramatically increase premiums for all customers to offset the revenue loss, potentially harming consumers the bill intends to help.
  • Policy mechanics conflict: The proposal conflicts with how life insurance is structured; policies like term life are priced assuming full-term premium payments, while whole life policies intentionally build cash value through ongoing premiums—this bill could make whole life products impossible to offer.

Compiled from official sources — confirm details with the bill’s official record.

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