L&HMImedium
What is the primary effect of a spendthrift clause in a Michigan life insurance settlement option?
AIt allows the insured to accelerate the death benefit
It shields proceeds held under a settlement option from beneficiary's creditors and from voluntary assignment
CIt permits the insurer to deny payment of the death benefit
DIt converts the death benefit to a single lump-sum payment by default, eliminating installment payouts and overriding the settlement option
Why this is the answer
A spendthrift clause attached to a settlement option in a Michigan life policy protects unpaid installments from the beneficiary's creditors and bars voluntary assignment or commutation, preserving income for the beneficiary.
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