Unlocking a iphone that was reported lost, and locked by company?

Okay So I have an iphone 5 with tmobile and I was going to report it lost so they'll send me another iphone, and all I'd have to do is pay the deductible.

However, I've been told if I do this the phone that is reported lost will be "forever locked" by the company and will never again be able to be used, at least not in the united states.
Is this true?

I was wanting to give the original phone to a friend of mine if it was going to be able to be re-activated somehow.

I heard of "jailbreaking" but I'm not even sure what that is or if its even relevant, I don't know anything about phone technology

It will be Blocked using its IMEI number, no network will allow access once blocked, Jailbreaking will not help as this number is unique and hard-coded into the device.

Your original device will be locked, yes. It won't be unlocked unless you take it back to the company, in which case they will most likely repossess your new iPhone and return your money. If you want another iphone, easiest thing to do is just buy a new one