State RegulationsMI specificDifficulty 2/5
A Michigan insurer is designing the inflation protection options it will offer alongside a new long-term care policy. Under M.C.L. 500.3909, which combination of offerings satisfies the statute?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
M.C.L. 500.3909, within Michigan's long-term care chapter (M.C.L. 500.3901 to 500.3955), requires the insurer to offer inflation protection no less favorable than annual compounding increases of at least 5%, or a guaranteed right to periodic benefit increases without evidence of insurability, or a benefit expressed as a percentage of actual charges. Offering all qualifying structures, as in option A, plainly satisfies the requirement and gives the applicant a genuine choice among ways to keep benefits current.
Why the other options are wrong
- B) An immediate doubling of the benefit at issue is not one of the statutory inflation protection structures.
- C) Making increases contingent on passing a new medical exam is contrary to the statute's requirement of increase rights without insurability evidence.
- D) Restricting inflation benefits to nursing facility stays is not a qualifying structure and strips coverage from home and community-based claims.
Memory hook
The menu must include: 5% compound, guaranteed increases without underwriting, or percent of actual charges.