State RegulationsMI specificDifficulty 2/5
A policyholder in Flint returns her individual life policy to the insurer during the free-look period and requests her money back. Under Michigan law, what is the legal effect of the return?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
M.C.L. 500.4015 makes a policy returned during the free-look period void from the beginning — the contract is treated as if it had never been issued. The insurer must promptly refund everything paid, including the policy fee. The policyowner is restored to her original position with no premium cost for the review period.
Why the other options are wrong
- B) No insurer approval is needed; the return during the free-look period automatically voids the policy from the beginning.
- C) The avoidance is retroactive to issue, not merely to the date of return — that is what 'void from the beginning' means.
- D) The free look cancels the entire contract, not just riders; the base policy is void along with everything attached.
Memory hook
Free look return = never issued at all.