State RegulationsMI specificDifficulty 3/5
The time limit on certain defenses has expired on a Michigan disability policy. Which ground still allows the insurer to avoid liability under M.C.L. 500.3408?
Select an option to reveal the answer and the full 3-part explanation — free, no signup.
Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
M.C.L. 500.3408 excepts nonpayment of premium from the time limit on defenses. The expiring defense period only strips the insurer's ability to contest the policy for misstatements or undisclosed conditions; the premium-payment obligation continues, and failure to pay remains a live defense at all times.
Why the other options are wrong
- B: After the time limit expires, application misstatements can no longer be used to contest the policy.
- C: Preexisting conditions not excluded by name in the application cannot be denied once the limit has run.
- D: An occupation change is handled by the optional change-of-occupation provision, not by a defense under this section.
Memory hook
Misstatements age out — unpaid premiums never do.