State RegulationsMI specificDifficulty 1/5
Under the illegal occupation provision permitted by M.C.L. 500.3452, a Michigan disability insurer is not liable for a loss sustained while the insured is doing what?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
M.C.L. 500.3452 authorizes the illegal occupation optional provision for Michigan individual disability policies. When the provision is in the policy, the insurer is not liable for any loss sustained while the insured is engaged in an occupation or employment that is illegal under the law of the jurisdiction where it is carried on. The provision targets only unlawful work; lawful but hazardous occupations are handled by other provisions such as change of occupation, and ordinary employment changes have no effect on liability.
Why the other options are wrong
- B) Unemployment itself never triggers the illegal occupation provision; it concerns unlawful work, not joblessness.
- C) Hazardous but lawful work is a risk-pricing matter under other optional provisions, not a bar to liability under M.C.L. 500.3452.
- D) Part-time or post-retirement employment is lawful work and does not invoke the illegal occupation exclusion.
Memory hook
If the job itself is a crime, the disability policy won't pay for it.