State RegulationsMI specificDifficulty 3/5
A Michigan individual life policy has passed its 2-year incontestability period. Which ground still allows the insurer to avoid paying under M.C.L. 500.4014?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
M.C.L. 500.4014 expressly keeps nonpayment of premium outside the 2-year incontestability shield — coverage can end for unpaid premiums at any time. The section's other exceptions concern wartime military service violations and separately limited disability or accidental-death riders, while a misstatement of age is corrected by adjusting the benefit under M.C.L. 500.4018 rather than by contesting the policy.
Why the other options are wrong
- A) After 2 years the insurer can no longer contest the policy over application statements; only the statutory exceptions survive.
- C) Occupation statements, like other application misstatements, become uncontestable after the 2-year period under M.C.L. 500.4014.
- D) A misstatement of age is never a contest ground — M.C.L. 500.4018 requires the benefit to be adjusted to what the premium paid would have purchased.
Memory hook
The 2-year shield blocks misstatements, not missed premiums.