State RegulationsMI specificDifficulty 3/5
A universal life applicant receives the required policy cost information only 2 days before the policy is delivered. Under M.C.L. 500.4038, what effect does this timing have on the free-look right?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
M.C.L. 500.4038(4) through (6) require the policy information to be delivered at least 5 days before delivery of the policy; if the policy is delivered sooner than 5 days after the information, the free-look period extends to 15 days. The extension preserves the applicant's meaningful chance to review the cost factors before committing, and direct-response policies instead receive at least 10 days for an unconditional refund under the same Michigan Insurance Code scheme.
Why the other options are wrong
- A) The 10-day baseline does not stand unchanged; delivery of the policy less than 5 days after the cost information triggers the 15-day extension.
- C) 30 days overstates the extension; the statute sets the extended free-look period at 15 days for this disclosure failure.
- D) The remedy is a longer free look, not a prohibition on delivery; the policy may be issued with the extended refund right.
Memory hook
Info late? Free look grows to 15.