An insured in Grand Rapids worked as an accountant when she bought an individual disability policy containing the change of occupation provision. She later became a logging contractor, and the premiums were never adjusted. She is now disabled by an injury suffered while logging. What may the insurer do?

Why C is correct

Under the change of occupation optional provision authorized by M.C.L. 500.3432, a move to a more hazardous occupation does not void the policy or forfeit the claim. The insurer's remedy is an equitable adjustment: the benefit is set at the amount the premiums actually paid would have purchased had the insured been charged for the riskier occupation from the start. This keeps the contract enforceable while preventing the insured from receiving coverage priced for a safer job than the one held when the loss occurred.

Why the other options are wrong

• A) With this provision in the policy, the occupation change is handled by adjusting the benefit, not by denying the claim outright.
• B) Paying at the old occupation's basis would overpay a claim underwritten for a safer risk; the adjustment works the other direction.
• D) Rescission and premium refund apply to misrepresentation situations, not to a lawful occupation change under M.C.L. 500.3432.

Memory hook

Riskier job, smaller check: the benefit shrinks to what the old premium bought at the new risk.