Not legal advice. We paraphrased these Michigan statutes from the Legislature's official site on November 2, 2026, and read the Michigan Supreme Court's opinion in full.
What is different in Michigan
Michigan’s main claim-payment rule is a statute rather than a regulation, and it carries real money: benefits not paid on time earn 12% simple interest a year. The same statute requires the insurer to tell the claimant, in writing and within 30 days, what proof of loss it needs. Michigan also requires every life policy to promise 30 days’ written notice before coverage ends, and it uses a strict materiality test for application misstatements: the truth must have led the insurer to refuse the policy, not merely to charge more.
Contest period
A Michigan life policy must state that the whole agreement consists of the policy plus the application attached to it, and that once the policy has stayed in force for two years from its date while the insured was living, it can no longer be contested. The exceptions are nonpayment of premium, violations of wartime naval and military service provisions, and, at the insurer’s option, total-and-permanent-disability benefits and additional accidental-death coverage (MCL 500.4014).
Grace period and the 30-day termination notice
Every premium after the first year gets a one-month grace period, which may carry an interest charge. The insurance stays in force during that month, and a death in that window lets the insurer subtract the unpaid premium from the payout (MCL 500.4012(a)).
The policy must also provide that the insurer will send written notice to the policyowner’s last known address at least 30 days before coverage terminates (MCL 500.4012(b)). The requirement does not apply to an insurer that collects most of its annual premium in person. If a policy is said to have lapsed, ask the insurer for a copy of that notice and proof of when and where it was sent.
Claim deadlines and 12% interest
MCL 500.2006 sets the timetable for paying an insured or “a person directly entitled to benefits under its insured’s insurance contract,” which includes a named beneficiary:
- Proof-of-loss letter, 30 days. The insurer must specify in writing what materials make up satisfactory proof of loss no later than 30 days after receiving the claim, unless it settles within those 30 days (MCL 500.2006(3)).
- Payment, 60 days. A claim is paid on time if paid within 60 days after the insurer receives proof of loss. If proof covers only part of the claim, that part is due within 60 days, and the rest within 60 days after its proof arrives. If the proof clearly shows that the insurer needs more medical information to decide liability on a life policy, the 60 days run from receipt of that information (MCL 500.2006(3)).
- Interest. Benefits not paid on time bear simple interest at 12% a year, counted from 60 days after satisfactory proof of loss was received, paid with the benefit itself (MCL 500.2006(4)). If the claimant rejects an offer and later recovers no more than the offer, no interest is due.
- Unknown payee. Payment is not late during any period when no one can give a valid release, or the insurer cannot tell who is entitled to the money, as long as it promptly told the claimant and offered in good faith to pay once that is resolved (MCL 500.2006(3)). Competing beneficiary claims can therefore stop the clock.
Failing to pay on time, or to pay the interest, is an unfair trade practice unless the claim is reasonably in dispute (MCL 500.2006(1)).
Unfair claim practices
MCL 500.2026(1) lists unfair claim practices that apply when they form a course of conduct rather than an isolated incident. The list includes misrepresenting policy terms, slow acknowledgment of claim communications, denying payment before reasonably investigating, taking unreasonably long after proof of loss to accept or reject coverage, and failing to try in good faith to settle once liability is reasonably clear.
Application misstatements
A misrepresentation does not void a policy or defeat recovery unless it was material, and it is material only if the insurer’s knowledge of the true facts would have led it to refuse to make the contract (MCL 500.2218(1)). The insurer’s own practice with similar risks is admissible on that question (MCL 500.2218(3)). Two rules cut the other way. A false statement that the applicant had no prior medical treatment, consultation or hospital care is treated as a statement that the applicant did not have the condition involved. And if the claimant blocks full disclosure of the medical condition, the misrepresentation is presumed material (MCL 500.2218(4)).
The policy must also provide that the insured’s statements, absent fraud, are representations rather than warranties, and that a statement cannot void the policy unless it is in a written application that was attached to, or endorsed on, the policy at issue. Electronic applications count (MCL 500.4016).
Damages beyond the policy
In Kewin v. Massachusetts Mutual Life Insurance Co., a disability income case, the Michigan Supreme Court held that an insurance policy of that kind is a commercial contract. It held that mere breach does not support damages for mental distress, and that, absent tortious conduct independent of the breach, exemplary damages cannot be awarded for breach of a commercial contract. Kewin, 409 Mich. 401 (1980). That is one reason the 12% statutory interest matters so much for Michigan beneficiaries.
When the beneficiary caused the death
Anyone who kills the decedent feloniously and intentionally, or who is convicted of abuse, neglect or exploitation of the decedent, forfeits benefits from the estate. The killing or conviction also revokes revocable dispositions to that person in a “governing instrument,” and the instrument is applied as if the killer or felon disclaimed them (MCL 700.2803(1)-(2), (4)). A final conviction conclusively establishes the person as the killer. Without a conviction, the court, on petition of an interested person, decides under a preponderance-of-the-evidence standard whether the person would be found criminally accountable for the felonious and intentional killing (MCL 700.2803(6)).
Former spouses: MCL 700.2807
Michigan’s Estates and Protected Individuals Code revokes gifts to an ex-spouse when a marriage ends. Under MCL 700.2807, unless the governing instrument’s express terms, a court order or a property-division contract between the divorced individuals provides otherwise, a divorce or annulment revokes a revocable disposition to the former spouse, or to the former spouse’s relatives, in an instrument executed before the divorce. A “disposition” includes a benefit to a beneficiary designated in a governing instrument (MCL 700.2806(a)). The former spouse is then treated as having disclaimed. A decree of separation that does not end the marriage is not a divorce for this purpose, and a remarriage to each other or a nullified divorce revives the designation. Employer plans may be governed by ERISA instead (Egelhoff).
Worked example
A beneficiary files a claim that the insurer receives on March 20, 2026. By April 19 (30 days), the insurer must either settle or say in writing what proof of loss it needs. The beneficiary sends the certified death certificate and claim form, and the insurer receives them on April 14. If the proof shows no need for more medical information, payment is timely through June 13 (60 days). If the insurer pays on August 12 instead, it owes 12% simple interest on the benefit for the period after June 13, paid along with the benefit. If two people claim the same benefit and the insurer promptly told them it could not tell who was entitled and offered to pay once that was settled, that period does not count as late.
Making a complaint
Michigan’s Department of Insurance and Financial Services takes insurance complaints online, by email, by fax or by mail: Filing a Complaint with DIFS. A complaint does not stop any deadline to sue.
Sources
- Michigan Compiled Laws 500.2006, 500.2026, 500.2218, 500.4012, 500.4014, 500.4016 and 700.2803 (official text, Michigan Legislature): legislature.mi.gov.
- Kewin v. Massachusetts Mutual Life Ins. Co., 409 Mich. 401 (1980) (full opinion, CourtListener): courtlistener.com. Read November 2, 2026.
- Michigan Department of Insurance and Financial Services, Filing a Complaint: michigan.gov/difs.
- Michigan Compiled Laws 700.2806 and 700.2807 (Michigan Legislature): legislature.mi.gov.
Not legal advice. This page summarizes general rules and the specific statutes cited. Your policy's wording, the state whose law applies, and whether the coverage came through an employer can all change the result. See the disclaimer and editorial policy.