State RegulationsMI specificDifficulty 3/5
An insurer is drafting marketing material for the accelerated benefit riders it sells with Michigan life policies. Which statement accurately describes how these riders work under M.C.L. 500.3928 and 500.3949?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
Under M.C.L. 500.3928 and 500.3949, an accelerated benefit is payable only when the insured meets the qualifying condition defined in the rider, and any amount paid is an advance that reduces the death benefit. Marketing that portrays the advance as producer-discretionary, benefit-increasing, or tied to the contestability clock would misstate Michigan law.
Why the other options are wrong
- A) The producer has no discretion over payment; the rider's qualifying condition determines whether the benefit is payable.
- B) Acceleration moves payment earlier without increasing it — the total ultimately payable is reduced by the advance.
- D) Payment depends on the qualifying condition in the rider, not on the expiration of the 2-year contestability period.
Memory hook
Condition defined in the rider, benefit reduced by the advance.