Michigan Life Insurance

If you have people who depend on you, life insurance offers precious peace of mind; if you pass, the policy provides financial support for your family. The laws that regulate life insurance companies are different in each state. Before you buy life insurance in Michigan, it's important to understand how the insurance code affects you and your beneficiaries.

Michigan Life Insurance Rules and Specifics

In Michigan, life insurance companies must follow Act 218 of the Insurance Code of 1956. The Michigan Department of Insurance and Financial Services (DIFS) is responsible for enforcing the regulations.

Free Look Period

Under section 500.4015 of Michigan's insurance code, life insurance companies are required to offer a free look period of 10 days. During that time, you can cancel the policy. In addition, the company must give you a full refund of the premium and any other fees. You must send the policy with a written notice or hand over the policy in person with your request for cancellation. Some life insurance companies in Michigan offer longer look periods.

Grace Period

After you're covered under a life insurance policy for a full year, Michigan law requires the insurance company to offer a one-month grace period for every premium that's due. As long as you make the payment within that month, plus an interest charge, you'll remain covered by the policy. If you die during that month, the company will subtract the late payment from the payout. 

After the grace period ends, the insurer can end the policy; however, they must send a notice by mail at least 30 days before they cancel your coverage.

Incontestability

Life insurance policies must have an incontestability clause. This clause prevents insurance companies from canceling coverage or denying a payout if you provide incomplete or mistaken information after you've had the policy for two years. The law makes exceptions when:

• You don't pay your premiums
• You break the policy's rules about wartime military service
• You have insurance that covers permanent disability and/or death by accident

Life Insurance Resources in Michigan

As you search for a life insurance policy in Michigan, these agencies can help:

• Michigan Department of Insurance and Financial Services (DIFS): DIFS offers a variety of consumer resources. Visit the website for insurance education materials. You can also call the agency to verify that your agent and company are licensed and registered in the state of Michigan.
  
  
• Michigan Life & Health Insurance Guaranty Association: This non-profit protects insurance policyholders in Michigan. If a member company can't pay policy benefits, the organization will cover the claim.
  
  

National Association of Insurance Commissioners (NAIC): NAIC is a nationwide organization that helps ensure fair insurance markets. Look to the Consumer Resources section to learn about life insurance. The NAIC website database also helps you find information about Michigan providers, including financial overviews, complaints and licensing status.