Maya of Ann Arbor owns an individual life insurance policy on her own life and has named her sister as the beneficiary. Under Michigan law, who holds the contractual rights of ownership, such as changing the beneficiary, assigning the policy, and surrendering it for cash?

Why A is correct

Under Michigan law, the rights of ownership — changing the beneficiary, assigning the policy, borrowing against it, and surrendering it — belong to the policyowner, not to the beneficiary, who holds only an expectation of future payment. Michigan protects policies on one's own life and on family members' lives (M.C.L. 500.2207), and the beneficiary acquires rights only when the death benefit becomes payable. Practically, only Maya can direct what happens to the contract while she lives.

Why the other options are wrong

• B) The named beneficiary has only an expectancy while the insured is alive; she cannot change the beneficiary or exercise any ownership right until the death benefit is payable.
• C) The selling producer has no ownership interest in the contract; agency duties end with the sale and servicing requests must come from the policyowner.
• D) The insurer administers the contract but holds no ownership rights; it must follow the policyowner's valid instructions.

Memory hook

Owner rules the contract; the beneficiary only waits.