(a) If the pre-need funeral contract purchaser chooses to fund the contract by a prearrangement insurance policy, the enrollment or application form for the prearrangement insurance policy or certificate shall be submitted to the insurance company by the pre-need sales agent within fifteen (15) calendar days of receipt.
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Terms Used In Tennessee Code 62-5-409

  • Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
  • Commissioner: means the commissioner of commerce and insurance or the commissioner's designee. See Tennessee Code 62-5-403
  • Contract: A legal written agreement that becomes binding when signed.
  • Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
  • Funeral establishment: means any business, whether a proprietorship, partnership, firm, association or corporation, engaged in arranging, directing or supervising funerals for profit or other benefit, the preparing of dead human bodies for burial, the disposition of dead human bodies, the provision or maintenance of place for the preparation for disposition, or for the care or disposition of human bodies. See Tennessee Code 62-5-101
  • Insurance company: means any corporation, limited liability company, association, partnership, society, order, individual or aggregation of individuals engaging in or proposing or attempting to engage as principals in any kind of insurance business, including the exchanging of reciprocal contracts between individuals, partnerships, and corporations. See Tennessee Code 62-5-403
  • Legal tender: coins, dollar bills, or other currency issued by a government as official money. Source: U.S. Mint
  • Person: includes a corporation, firm, company or association. See Tennessee Code 1-3-105
  • Personal representative: when applied to those who represent a decedent, includes executors and administrators, unless the context implies heirs and distributees. See Tennessee Code 1-3-105
  • Pre-need funeral contract: means any agreement, contract or plan requiring the payment of money in advance, whether in a lump sum or installments and whether funded by a pre-need funeral trust or prearrangement insurance policy or combination of a pre-need funeral trust and a prearrangement insurance policy, that is made or entered into with any person, association, partnership, firm or corporation for the final disposition of a dead human body, for funeral or burial services or for the furnishing of personal property or funeral or burial merchandise, wherein the use of the personal property or the funeral or burial merchandise or the furnishing of professional services by a funeral director or embalmer is not immediately required. See Tennessee Code 62-5-403
  • Pre-need sales agent: means an individual who has applied for and has been granted, or who engages in conduct requiring, registration to sell pre-need funeral contracts on behalf of a pre-need seller pursuant to this part. See Tennessee Code 62-5-403
  • Prearrangement insurance policy: means a life insurance policy, annuity contract, or other insurance contract, or any series of contracts or agreements in any form or manner, issued by an insurance company, that, whether by assignment or otherwise, funds a pre-need funeral contract, the insured or annuitant being the person for whose funeral service the funds were paid. See Tennessee Code 62-5-403
  • Representative: when applied to those who represent a decedent, includes executors and administrators, unless the context implies heirs and distributees. See Tennessee Code 1-3-105
  • State: when applied to the different parts of the United States, includes the District of Columbia and the several territories of the United States. See Tennessee Code 1-3-105
  • United States: includes the District of Columbia and the several territories of the United States. See Tennessee Code 1-3-105
  • written: includes printing, typewriting, engraving, lithography, and any other mode of representing words and letters. See Tennessee Code 1-3-105
(b) It is unlawful for any life insurance company, fraternal benefit society or other similar company, association or society issuing prearrangement insurance policies, by whatever name they may be called, upon the lives of citizens of this state, to:

(1) Designate, in the policy or otherwise, the person, firm or corporation to conduct the funeral of the insured, or to organize, promote or operate any enterprise or plan, or to enter into any contract with the insured or with any other person, which plan or contract tends to limit or restrict the freedom of choice in the open market of the person or persons having the legal right of the choice regarding contracts, purchases and arrangements with reference to any part of a funeral service for the insured;
(2) Provide in the policy or otherwise that the face amount of the policy, or any loss or indemnity, that may accrue under the policy, shall be payable in anything other than legal tender of the United States and of this state to the beneficiary named in the policy or the legal representative of the insured, and any provision to the contrary shall be null and void;
(3) Enter into any contract with any funeral director, providing that the funeral director shall conduct the funeral of persons insured by the insurance company, fraternal benefit society, or similar company. This subsection (b) shall not be construed to prohibit any beneficiary under a policy from assigning the policy to a funeral establishment of the beneficiary’s choice after death of the insured has occurred and liability has accrued; or
(4) Enter into any contract with any citizens of this state, contracting and agreeing to furnish funeral merchandise or services upon the death of any person insured.
(c) It is unlawful for any person, firm or corporation to enter into any contract, conditioned to take effect on the death of any person, wherein the person, or the personal representative, heirs or next of kin of the person, is promised any rebate, discount or reduction in price for or on account of funeral merchandise, expenses or services by virtue of the person being issued the policy or certificate, or being designated as beneficiary in the policy, or by virtue of the person entering into the contract or being designated in the policy as the recipient of any such rebate, discount or reduction in price.
(d) Notwithstanding any other provision of this part, if the insurance company issuing the policy does not offer a funeral trust, or only offers a funeral trust for an additional charge, then the beneficiary or the owner of the policy may irrevocably assign the policy or policy benefits to a funeral establishment; provided, however, that the assignment shall not limit, or be construed as limiting, the ability of the pre-need funeral contract beneficiary or the beneficiary’s lawful representative from selecting a different funeral establishment to provide merchandise and services. If a subsequent establishment is designated, then the establishment to which the policy or policy benefits are currently assigned shall, upon written notification, promptly execute any documents necessary to transfer the assignment.
(e) Nothing in this section shall be construed to prohibit the irrevocable assignment of policy benefits to a trust set up to allow for the distribution of the benefits to the funeral home of the policyholder’s choosing.
(f) No assignment of the rights or benefits under a prearrangement insurance policy shall be valid unless it is done on a form approved by the commissioner.
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