State RegulationsMI specificDifficulty 2/5
A return-of-premium rider on an individual long-term care policy is typically designed so that:
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
A return-of-premium rider returns some or all premiums according to its terms — commonly to a beneficiary on the insured's death or to the owner upon surrender after a specified period. Michigan's long-term care chapter (M.C.L. 500.3901 to 500.3955) governs rider design and disclosure. This optional rider is distinct from the statutory 30-day return right in M.C.L. 500.3943.
Why the other options are wrong
- A) Claim denials do not trigger any refund of premiums under the rider.
- B) The rider does not automatically refund premiums yearly; it pays according to the specified trigger terms such as death or surrender.
- D) Refunds tied to insurer-initiated cancellation are not the rider's purpose.
Memory hook
ROP rider = get premiums back at death or surrender, per the rider's terms.