State RegulationsMI specificDifficulty 2/5
After a Michigan policyowner receives an accelerated benefit under a living benefit rider, does any coverage remain under the policy?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
M.C.L. 500.3928 and 500.3949 structure living benefits as partial accelerations of the existing death benefit: the policy stays in force for the remaining amount, and the beneficiary is paid that remainder when the insured dies. The rider drains part of the benefit early — it does not empty the contract or demand repayment.
Why the other options are wrong
- A) The policy does not lapse after an accelerated payment; the remaining death benefit stays in force under Michigan law.
- C) The remaining death benefit is reduced by the advance; the original full amount is no longer payable.
- D) No repayment mechanism exists — the advance is simply deducted from the death benefit at the insured's death.
Memory hook
The rider takes a slice, the policy serves the rest.