State RegulationsMI specificDifficulty 1/5
Under M.C.L. 500.2218, a false statement in an application for disability insurance bars recovery only when which condition is met?
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 B is correct
M.C.L. 500.2218 governs the effect of false statements in applications for disability insurance under the Michigan Insurance Code. A misstatement does not by itself defeat recovery: recovery is barred only if the statement was made with actual intent to deceive the insurer or if it increased the risk of loss. This consumer-protection standard means innocent or immaterial errors cannot be used as a blanket reason to deny otherwise valid disability claims.
Why the other options are wrong
- A) The statute turns on intent to deceive or increased risk, not on which subject the false statement touches.
- C) Where a statement appears is irrelevant; the application is part of the contract evidence, and the statutory test is deceptive intent or added risk.
- D) Timing of discovery does not create a defense; the insurer must still show intent to deceive or an increased risk of loss under M.C.L. 500.2218.
Memory hook
Lying only loses the claim if it was meant to deceive or made the risk worse.