Free Individual Accident and Health Provisions Study Guide
Michigan Life, Accident & Health exam — Individual Accident and Health Provisions.
The national guide explains the uniform individual accident and sickness provisions in NAIC Model 180. Michigan enacted them in chapter 34 of the Insurance Code (MCL 500.3407–3452). Most of the Michigan numbers match the model. Note the Michigan specifics: the 2-year limit for Michigan-delivered policies, the 5-day nonrenewal notice in the grace period clause, and the 10-day or 30-day free look.
Required provisions (Michigan wording)
| Provision | Michigan rule |
|---|---|
| Entire contract; changes | The policy, riders, endorsements and attached papers are the whole contract. Changes need an executive officer's approval and must be endorsed or attached. A producer can't change or waive anything (3407). |
| Time limit on certain defenses | After the stated period, non-fraudulent misstatements can't void the policy or deny a claim. For policies delivered in Michigan the period may not exceed 2 years. Uniform multistate forms may print 3 years, but Michigan policies are limited to 2 (3408). |
| Grace period | At least 7 days for weekly premiums, 10 days for monthly, and 31 days for others. Coverage continues during it (3410). An insurer that reserves the right to nonrenew may exclude the grace period if it gave nonrenewal notice at least 5 days before the due date. |
| Reinstatement | On approval, or on the 45th day after a conditional receipt unless disapproved. Covers accidents after reinstatement and sickness beginning more than 10 days later. Back premium can't go back more than 60 days before reinstatement (3411). |
| Notice of claim | Within 20 days of the loss, or as soon as reasonably possible (3412). An optional clause may require notice of continued disability every 6 months. |
| Proof of loss | Within 90 days. Late proof is accepted if given as soon as reasonably possible, and no later than 1 year after it was due unless the claimant lacked legal capacity (3414). |
| Time of payment | Periodic benefits are paid at least monthly (3416) |
| Payment of claims | The policy may allow up to $1,000 to be paid to a relative. It may allow direct payment to the provider unless the insured objects in writing (3418). |
| Physical exam and autopsy | At its own expense, the insurer may examine the insured as often as reasonably required during a claim, and may perform an autopsy where the law allows (3420) |
| Legal actions | No suit until 60 days after proof of loss. No suit after 3 years from when proof was required (3422). |
Optional provisions
- Change of occupation (3432): a riskier occupation means benefits are cut to what the premium would buy. A safer occupation means a lower rate and a refund of excess unearned premium.
- Misstatement of age (3434): benefits are what the premium would have bought at the correct age.
- Other insurance in this insurer (3436): coverage over the stated maximum is void and its premium returned, or the insured may choose which policy to keep.
- Unpaid premium (3446): premium due can be deducted from a claim.
- Conformity with state statutes (3450): a conflicting provision is amended to meet the minimums of the insured's state of residence.
- Illegal occupation or criminal activity (3452): "willful criminal activity" includes drunk driving and operating a methamphetamine lab. It does not include civil infractions or conduct less than a misdemeanor.
Free look and cancellation (MCL 500.3409)
- An individual disability policy needs a front-page notice giving 10 days after receipt to cancel for a full refund.
- When the policy is sold by solicitation to someone eligible for Medicare, the period is 30 days.
- If the policy is canceled, the insurer refunds premium above the pro rata amount for the time expired, without prejudice to earlier claims.
Genetic information
An insurer may not require genetic testing or disclosure of genetic test results or genetic information to issue or renew a health policy (3407b).
Common exam traps
- Time limit on certain defenses: no more than 2 years for Michigan-delivered policies.
- Grace periods: 7 / 10 / 31 days.
- Notice 20 days. Proof 90 days, with an outside limit of 1 year. Suit after 60 days and within 3 years.
- Disability free look: 10 days, or 30 for Medicare-eligible buyers solicited.
- Michigan's optional criminal activity provision covers drunk driving but not civil infractions.
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Practice questions are study aids generated for exam preparation and are not actual exam questions. Content is provided for educational purposes and is not legal advice. Verify current statutes, rules, and exam specifications with the Insurance Department and the exam administrator before relying on it.
