What renewability provision must an individual long-term care insurance policy contain under Michigan law?

Why B is correct

M.C.L. 500.3907 requires individual long-term care insurance policies in Michigan to be guaranteed renewable. The policyholder keeps the coverage by paying premiums, and the insurer cannot cancel or refuse renewal because the insured's health has declined or because claims have been paid, which is essential protection for a product purchased decades before care is needed.

Why the other options are wrong

• A) Discretionary renewal is the opposite of the guaranteed renewability the statute mandates.
• C) Guaranteed renewability is not cut off at a stated maximum age; it continues while premiums are paid.
• D) Annual requalification would let the insurer re-underwrite each year, which guaranteed renewability forbids.

Memory hook

LTC is guaranteed renewable: pay the premium, keep the policy.

Why B is correct

M.C.L. 500.3907 requires individual long-term care insurance policies to be guaranteed renewable, meaning the insurer cannot single out an insured for cancellation or refuse renewal as long as premiums are paid. Michigan's long-term care chapter (M.C.L. 500.3901 to 500.3955) also requires a nonforfeiture option to be offered, but the applicant may decline it.

Why the other options are wrong

• A) Partnership inflation rules vary by age, but nothing in Michigan law limits issuance to applicants under age 61.
• C) Long-term care policies may cover skilled, intermediate, and custodial levels of care.
• D) A nonforfeiture option must be offered under M.C.L. 500.3910, but the applicant is not required to purchase it.

Memory hook

Individual LTC = guaranteed renewable, M.C.L. 500.3907.

Why A is correct

Michigan requires individual long-term care policies to be guaranteed renewable (M.C.L. 500.3907, within M.C.L. 500.3901 to 500.3955). Guaranteed renewable status means the insurer cannot cancel or nonrenew the policy, and cannot single out this insured for a rate increase, because of her age, health change, or claims, so coverage remains in force as long as premiums are paid. This is precisely the protection a deteriorating insured relies on most.

Why the other options are wrong

• B) Cancelling or nonrenewing once the insured begins needing care is exactly what the guaranteed renewable requirement forbids.
• C) Entering a claim does not force the policy into paid-up nonforfeiture status; the policy continues in force with full benefits while premiums are paid.
• D) Guaranteed renewable status prevents the insurer from re-rating this individual because of her own health change or claim history.

Memory hook

Guaranteed renewable: pay the premium, keep the policy, even when health fails.