State RegulationsMI specificDifficulty 2/5
What protection must a Michigan insurer offer with individual long-term care insurance policies for policyholders who later stop paying premiums?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
M.C.L. 500.3910 requires Michigan insurers to offer a nonforfeiture benefit option with individual long-term care policies. If the policyholder later stops paying premiums, the nonforfeiture option preserves some policy value instead of letting years of premiums evaporate. Combined with guaranteed renewability under M.C.L. 500.3907, this protects long-term care buyers against losing coverage late in life.
Why the other options are wrong
- B) Automatic premium loans are a life insurance mechanism, not the required LTC lapse protection.
- C) A death benefit tied to premiums paid is not the statutory protection; LTC policies pay care benefits, not death benefits.
- D) A free waiver-of-premium rider is not what M.C.L. 500.3910 mandates; the required offer is the nonforfeiture option.
Memory hook
Stop paying? LTC's nonforfeiture option keeps value from vanishing.