A policyowner returns a variable annuity contract during the free-look period after receiving it. Under M.C.L. 500.4073, what refund is the policyowner entitled to?

Why D is correct

M.C.L. 500.4073 gives annuity purchasers a free-look period of at least 10 days from receipt, with the returned contract void from the beginning; for a variable annuity the refund equals the unallocated premiums plus the separate-account value. This composition rule in the Michigan Insurance Code recognizes that part of the money has already been invested in the separate account, so the refund must sweep in both sources.

Why the other options are wrong

• A) The refund includes the separate-account value in addition to unallocated premiums; the policyowner is not made to forfeit invested value.
• B) Unallocated premiums not yet invested must also be returned; separate-account value alone understates the refund.
• C) Annuity contracts carry an explicit free-look right under M.C.L. 500.4073; variable annuities are not exempt, though certain employer-plan contracts required as a condition of employment are excepted.

Memory hook

Variable annuity refund = premiums in + separate account out.