State RegulationsMI specificDifficulty 2/5
A Kalamazoo business owner returns a newly delivered life policy to the insurer on the eighth day after receipt, within the examination period. What is the legal effect of the returned policy under M.C.L. 500.4015?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
M.C.L. 500.4015 provides that a policy returned within the free-look period is void from the beginning: the insurer promptly refunds the premium, including the policy fee, and coverage never legally attached. This protects Michigan applicants during the examination period while ensuring there was never a period of insured risk under the returned contract.
Why the other options are wrong
- B) The retroactive voiding is the whole point of the free look; the policy does not merely terminate on the return date under M.C.L. 500.4015.
- C) No insurer approval is needed; return within the examination period itself voids the policy from the beginning by statute.
- D) The free-look return produces a full refund and a void policy, not a conversion to reduced paid-up insurance.
Memory hook
Returned in time = never a contract at all.