State RegulationsMI specificDifficulty 1/5
What is the primary purpose of a living benefit provision or rider in a Michigan life insurance policy?
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
Michigan addresses living benefit provisions at M.C.L. 500.3928 and M.C.L. 500.3949, and their defining feature is acceleration: the policyowner may receive a portion of the policy's death benefit during the insured's lifetime upon a qualifying condition. This converts part of a benefit otherwise payable only at death into cash when the insured and the family need it most. Nothing is added to the policy — the advance comes out of the existing death benefit.
Why the other options are wrong
- A) A living benefit rider does not enlarge the death benefit; it merely advances a portion of it before death.
- B) The right to buy additional coverage later is the guaranteed insurability rider, a different provision with a different trigger.
- C) Suspending premiums during disability is the waiver-of-premium provision, which pays premiums rather than advancing death benefits.
Memory hook
Living benefits pay while you're living — out of the death benefit, not on top of it.