State RegulationsMI specificDifficulty 2/5
A Michigan disability income policy, which is not a health policy, contains an incontestability clause. Under Michigan law, what is the maximum period after policy issue during which the insurer may contest claims under the policy?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
M.C.L. 500.3408 prints the standard 3-year model language for the time limit on certain defenses, but the statute as amended caps the period: it shall not exceed 2 years for non-health disability policies. After 2 years the insurer generally loses the power to contest claims on the policy, making 2 years the safe Michigan figure.
Why the other options are wrong
- A: 1 year understates the statutory cap on the defense period.
- C: 3 years is the printed model text, but Michigan law caps the period at 2 years for non-health disability policies.
- D: 6 months is far shorter than the statutory maximum the law allows.
Memory hook
Michigan reads '3' but caps it at 2 — the statute has the final say.