Tennessee Code Title 56. Insurance § 56-7-312

(a) This section applies only to policies of life insurance issued prior to the operative date of § 56-7-401, the Standard Nonforfeiture Law.

(b) In the event of default in the payment of any premium due on any policy, there shall be secured to the owner of the policy a stipulated form of insurance as may be specified in the policy, the net value of which shall be at least equal to the reserve at the date of default on the policy and on any dividend additions thereto according to the mortality table and the rate of interest for computing the reserve as specified in the policy, less a sum of not more than two and one half percent (2 1/2 %) of the amount insured by the policy and of any existing dividend additions thereto and less any existing indebtedness to the company on the policy at the time of default; provided, that not less than three (3) full years' premiums shall have been paid; and provided, further, that the policy shall not be continued in force by virtue of any automatic loan provision in the policy.

(c) There shall also be secured to the owner of the policy the right to surrender the policy to the company at its home office within one (1) month from the date of default for a specified cash value at least equal to the sum that would otherwise be available for the purchase of insurance, and the payment of which cash value by the company shall not be deferred for more than six (6) months after application for the payment is made.