State RegulationsMI specificDifficulty 1/5
The optional provision addressing insurance with other insurers in a Michigan individual disability policy serves which purpose?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
The insurance with other insurers optional provision in Michigan disability policies, part of the optional-provision framework of Chapter 34 of the Michigan Insurance Code, addresses coverage the insured holds with different companies. Rather than voiding coverage or banning other insurance, it apportions the loss among the carriers on a proportional basis so the insured cannot collect overlapping duplicate benefits exceeding the permitted maximum for the loss.
Why the other options are wrong
- B) Michigan does not forbid other disability coverage; the provision manages overlapping claims, it does not ban other policies.
- C) The provision does not force the insured to pick one carrier; it governs how multiple carriers share the loss.
- D) The provision never merges contracts; it only allocates responsibility for a loss among the existing policies.
Memory hook
Many carriers, one loss: everyone pays a share, nobody pays twice.