What does Michigan law build into a life insurance policy to protect you?
Quite a lot, and it is written into the policy itself. A policy of the kind we sell, delivered in Michigan, gives you at least ten days to return it for a full refund, a month of grace on every premium after the first year, and a two year limit on the company's right to contest it.
On an individual life policy of the kind we sell, not a group plan through work, the free look is on the front page: the policy gives you at least ten days from the day it reaches you, and if you send the policy back within that time with a written request to cancel, to the company or to the agent who sold it, it is treated as never issued, with a full refund, policy fee included. After the first year a late premium does not end coverage on a policy like that: Michigan requires a month of grace, and unless the company is one that collects most of its yearly premiums in person, written notice to your last known address at least thirty days before coverage ends; a death during that month of grace is still covered, though the overdue premium can come off the payout. After two years in force during your lifetime the policy becomes incontestable, apart from unpaid premiums and a few narrow exceptions; on a universal life policy, if it lets you raise the amount of coverage later, the policy itself has to say whether a new contestability period, and a new suicide period, applies to that added coverage; replacing a policy starts the two years over from the beginning; and if your policy has a suicide clause, we read that page with you before you sign. On a claim, settlement is due within two months of proof of death, and if the payment is late, it carries simple interest at twelve percent a year, counted from sixty days after satisfactory proof reached the company; when the proof itself clearly shows the company needs more medical information to decide the claim, the payment still counts as on time if it is made within sixty days of that information arriving.
How Much Life Insurance Do You Need?Who in Michigan looks out for you if a company or an agent lets you down?
The Michigan Department of Insurance and Financial Services, the state department that regulates insurance in Michigan. It answers consumer questions directly, investigates complaints, and lets you check the license of any agent before you buy.
Its Office of Consumer Services asks you to try the company first; if that fails, you can file a complaint online or call 877-999-6442, Monday through Friday from 8 a.m. to 5 p.m., and translation is available for people with limited English. The Department's Locator tool shows whether an agent is licensed in Michigan, and the Department itself suggests you check before buying; we hope you look us up. It also runs a free search service that helps families find a relative's lost life insurance policy, which has helped recover more than $82 million for Michigan residents. The Department also suggests reviewing your application for accuracy before you sign, and that is a page we go through line by line with you. Everything else about your coverage, ask us, in English, Spanish, or Hebrew.
Term vs Whole Life InsuranceShould a Michigan family buy term or permanent coverage?
For most working households, term coverage sized to the mortgage and to the years the children depend on your income carries the load. Permanent coverage fits the needs that never expire, and Michigan law gives the money a family receives some real shelter.
Think in jobs rather than products. Term coverage protects a window: the twenty or thirty years when the mortgage, the car payments, and the children all lean on one or two paychecks. To size it, add up the debts that would outlive you, the years of income to replace, schooling, and final expenses, then subtract savings and any coverage at work that ends with the job. Permanent coverage does the lifelong job at a higher price and belongs where the need never ends: about one in five Michigan residents is 65 or older, and for many of those households the question is a modest permanent policy sized to final expenses and to what a family wants to leave behind. Michigan law shelters the proceeds of a policy payable to your spouse or children, cash value included, from your own creditors, unless the policy was transferred to defraud them.