State RegulationsMI specificDifficulty 3/5
A universal life applicant receives the required policy cost-factor disclosure, and the insurer delivers the policy sooner than 5 days after the disclosure. Under Michigan law, what is the effect on the free-look period?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Under M.C.L. 500.4038, universal life (and CVAT) policies require the policy information to be delivered within 15 working days after application and at least 5 days before delivery; if the insurer delivers the policy sooner than 5 days after the information, the applicant's unconditional refund period is extended to 15 days. The extension compensates the applicant who receives the policy without adequate time to study the cost disclosure first.
Why the other options are wrong
- A) Receiving the disclosure does not waive the free look; the statute instead extends the refund period to 15 days.
- C) Early delivery never shortens the free look; Michigan law lengthens it to protect the applicant.
- D) The standard period does not simply continue; when delivery precedes the 5-day disclosure interval, the refund period extends to 15 days.
Memory hook
Policy beats the 5-day gap? Free look stretches to 15.