If you live in Michigan and have been thinking about purchasing a life insurance policy, there are a few things you need to know. In the US, life insurance laws vary from state to state. This means that the life insurance situation in Michigan will be vastly different from it’s neighbor to the south, Indiana (or any other state for that matter).
Life Insurance Rules And Regulations In Michigan
The Michigan Insurance Code (Act 218 of 1956, to be specific) outlines all the regulations for the life insurance industry in the state. These laws are meant to protect you, the consumer. You can study the fine print of this code at the Michigan legislative website, but here at Life Ant, we thought we’d make it easy for our friends in Michigan by highlighting the key points of the code, below:
Free Look Period
“Free look periods” refer to the period of time that is given to a new owner of a life insurance policy (usually a week or two) that allows the policyholder to “back out” of the policy if they are not satisfied. The consumer, if they wish to cancel their policy, is given a full refund. In Michigan, there is no legally mandated free look period that life insurers have to abide by. However, most Michigan insurance companies will still offer a free look period as a company policy.
Michigan residents are given 30 days to make up for a late payment on their life insurance bill before the insurance company is legally allowed to terminate their policy. This allows policyholders for a little “wiggle room” when is comes to late payments (in case of accidents, lost mail, etc.).
While you are given 30 days to pay your bill, the insurance company is given 60 days to pay theirs. In the state of Michigan, once a claim is made, life insurers must pay on that claim within 60 days. This “timely payment” statute requires insurance providers to pay promptly once receiving proof of death. Like other life insurance laws in Michigan, this one was made with the protection of the consumer in mind.
For more information on your rights as a Michigan resident, please contact the insurance department at:
Michigan Department of Insurance and Financial Services
Michigan State Guaranty
All life insurance policies in the state of Michigan are backed by the Michigan Life and Health Insurance Guaranty Association. This means that in the event the company that sold you your policy goes bankrupt and shuts its doors, you will still be covered. This association insures your benefits as long as you are up to date on your premium payments and your previous insurer was legally licensed to sell insurance in the state. It will protect you for up to $300,000 in lost death benefits and for up to $100,000 in lost cash surrender.
The Michigan Life and Health Insurance Guaranty Association can be reached at:
1640 Haslett Road, Suite 160
Haslett, MI 48840-8683