State RegulationsMI specificDifficulty 3/5
An employee's group life coverage terminates. The employee dies 20 days later without having applied to convert. Under M.C.L. 500.4438, what does the beneficiary receive?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
M.C.L. 500.4438(1)(b) provides that if the insured dies during the 31-day conversion window, the group life benefit is payable, so the beneficiary receives the group coverage amount even though no individual policy was ever issued. The conversion privilege is treated as continuously available during the window, and the insurer cannot escape liability under the Michigan Insurance Code by pointing to the missing paperwork.
Why the other options are wrong
- A) The statute expressly covers death during the conversion window; the absence of an issued individual policy does not defeat the group benefit.
- B) A premium refund is not the statutory remedy; the full group death benefit is payable.
- D) There is no reduction for failing to apply; death during the window triggers payment of the entire group benefit.
Memory hook
Die in the window? The group check still comes.