Protect your family against the unthinkable with life insurance. Call Encore Insurance today at 248-466-0200. We offer more choices and less hassle for you in comparing insurance rates.
It takes a high level of maturity to admit one’s physical limitations and purchase a life insurance policy. The vision and humility required will benefit your loved ones for the rest of their lives. At Encore Insurance Group, we pride ourselves on providing our customers with clear, easy-to-understand information regarding life insurance in Michigan.
Michigan Laws Governing Life Insurance Companies
Gain new insight regarding the nuances of insurance law. Michigan’s state legislature and the courts have developed a system of laws governing the sale of insurance and other practices carried out by life insurance companies. Discover some of the most commonly encountered legal issues for life insurance policyholders.
Under Michigan law, life insurance companies must inform claimants, in writing, what constitutes valid proof of loss within 30 days of receiving filed claims. Life insurance companies must then pay insurance claims within 60 days of receiving valid proof of loss or interest will begin to accrue on the amount owed. Usually, medical records or a death certificate will suffice as proof of loss.
Free Look Period
According to state statutes, life insurance companies must issue a full refund for all life insurance policies canceled within 10 days of signing. This safeguard provides customers with a no-obligation, ‘free look’ at their life insurance policies. Customers can cancel their life insurance within 10 days for any reason or no reason at all.
Insurance companies in Michigan find themselves legally bound to provide current customers with a 30-day grace period to make good on a late payment. If the policyholder does not remit payment within the 30-day grace period, the insurance company may retroactively terminate the life insurance policy as of the date of the missed payment.
Is My Life Insurance Policy Guaranteed?
All life insurance policies in the State of Michigan enjoy the protection that the Michigan Life & Health Insurance Guaranty Association (MLHIGA), a nonprofit organization, provides.
If for any reason, your life insurance company cannot meet its obligation to pay you, MLHIGA will step in and disburse your death benefits, subject to certain limitations.
Think of the guarantee as a type of insurance for insurance. If your life insurance company goes bankrupt or otherwise dissolves, MLHIGA will gather up funds from all of the other member companies so that you can receive prompt payment.
Types of Life Insurance
Life insurance policies fall into one of two major categories: term or permanent. Understanding the difference between the two can have significant implications for your estate and your beneficiaries.
Term Life Insurance
Term life insurance gets its name because it covers the life of the insured for a preset term. Generally, customers can take out a term policy for between 10 and 40 years. In most cases, if the insured outlives the policy, the agreement ends without a disbursement, and the customer must purchase a new policy to regain coverage.
The benefits of term life insurance include:
- Affordable premiums
- Flexible durations
- Easy to understand
Permanent Life Insurance
Permanent policies, such as whole or universal life insurance, function much like term life insurance. However, unlike term life insurance policies, permanent life insurance has a cash value. As the customer pays premiums, some of that money remains within an account controlled by the policy. Under certain circumstances, the policyholder can access those funds early.
Unless canceled, whole and universal life insurance cover the insured for life.
Three of the main types of universal life insurance include:
- Guaranteed — Premiums and benefits never change
- Indexed — Cash value gets reinvested into stock market indexes; benefits change
- Variable — Policyholder decides how much to contribute within limits; benefits change
Encore Insurance: Your Local Michigan Life Insurance Agency
Sleep easy knowing that your family will have access to much-needed resources should the worst come to pass. Take out a new life insurance policy today with help from Encore Insurance Group. You can call our experienced insurance agency at 248-466-0200 or contact us online to get started.