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Key Person Insurance in Michigan

A life policy’s guaranty-association death-benefit protection in Michigan is capped at $300,000 per insured life. If your business is insuring more than one key person or buying a large benefit, ask how the state limit applies to each insured and to policies held by the same owner. Michigan requires written consent for employer-owned coverage; nonmanagement and retired employee coverage must be reasonably commensurate with projected unfunded benefit-plan liabilities. Ask the broker to identify whether the insured is a key employee or part of a benefit-plan cohort. Compare your ownership and insured’s role with Mich. Comp. Laws § 500.2210(2)–(4). 4,1

What Is Key Person?

Key person insurance pays the business, not the person’s family, when a founder, partner or employee it relies on dies. Disability, overhead expense and buyout funding are separate products to discuss on their own. Read the national Key person guide.

What to Watch for in Michigan

  • Document the Business Interest

    Michigan requires written consent for employer-owned coverage; nonmanagement and retired employee coverage must be reasonably commensurate with projected unfunded benefit-plan liabilities. Ask the broker to identify whether the insured is a key employee or part of a benefit-plan cohort. 1

  • Complete Written Notice and Consent

    Michigan bars retaliation for refusing coverage and treats policy proceeds under the cited section as exempt from the insured’s creditors or dependents. Confirm the policy is structured under that section and that the business is the beneficiary. 2,3

  • Check the State Guaranty Backstop

    For Michigan, NOLHGA reports a $300,000 life death-benefit ceiling. Ask whether your other nongroup policies count toward the association’s owner-level aggregate. Include it in the ownership and beneficiary review. For issuance, also check Mich. Comp. Laws § 500.2210(2)–(4). 4,5,1

Who Regulates Insurance in Michigan

Michigan Department of Insurance and Financial Services

The Michigan Department of Insurance and Financial Services licenses agents, agencies and companies, supervises insurance business, and helps resolve complaints. You can use its state lookup or complaint service to check a license or raise an insurance issue. 6,7,8

Surplus-lines tax and stamping office

Reported tax rate: 2.5% combined surplus-lines tax and regulatory fee on premium when Michigan is the insured's home state Michigan's Property and Casualty Guaranty Association is funded by insurers authorized to transact in the state; an insurer procured solely under Chapter 19 is expressly not considered authorized for that chapter. The surplus-lines policy must carry a notice that the insurer is not Michigan-licensed and insolvency claim payment may not be guaranteed. 9,10,11

Providers With Documented State Licenses

These providers publish a national listing for Key person; the state records document licenses for the entities and roles shown below. Some records rely on company-reported information rather than independent regulator verification. A national listing does not confirm the product is available in Michigan. Check the regulator’s license lookup and confirm state availability for your business when requesting a quote.

  • VouchVouch Specialty Insurance Services, LLCInsurance producer, Surplus-lines broker · checked 2026-09-28Vouch’s licenses page, effective January 16, 2025, lists producer licenses in all 50 states and DC. Its separate surplus-lines table includes Idaho number 870820, while a footnote says Georgia and Idaho do not issue agency-level surplus-lines licenses. Because those statements conflict for Idaho, this record keeps Idaho producer-only and does not treat the table number as established agency surplus-lines authority. The page is company-reported and does not establish product availability. 18

Questions to Ask Before You Buy in Michigan

  1. What Michigan law supports our business’s insurable interest in this person, and what should we retain to prove the role?
  2. What written notice and consent must the insured receive before this policy is issued, and can coverage continue after employment ends?
  3. How would Michigan’s guaranty-association limit apply to this policy and our other business-owned life policies?

Key Person in Michigan: FAQ

How much of a key person life policy is protected if an insurer fails in Michigan? 4,5

The listed Michigan cap for life death benefits is $300,000. A separate owner aggregate may matter when the same company holds several nongroup policies. NOLHGA reports an aggregate $5 million limit for one owner’s multiple nongroup life policies. 4,5

Does my business need an employee’s consent for key person insurance in Michigan? 2,3,1

Yes. Federal rules require written notice and consent before issue for the employer-owned life tax exception. Michigan bars retaliation for refusing coverage and treats policy proceeds under the cited section as exempt from the insured’s creditors or dependents. Confirm the policy is structured under that section and that the business is the beneficiary. Ask for a copy of the dated notice before the carrier issues coverage. For state-law details, check Mich. Comp. Laws § 500.2210(2)–(4). 2,3,1

Key Person in Other States

Other Coverage in Michigan

Sources

  1. 2024 Michigan Compiled Laws § 500.2210 — Employer Insurable Interest, Consent, Limits. State statute (Justia U.S. Codes and Statutes); Mich. Comp. Laws § 500.2210(2)–(4). Accessed 2026-09-28.
  2. 26 U.S.C. § 101(j) — Certain employer-owned life insurance contracts. Office of the Law Revision Counsel, U.S. House of Representatives; 26 U.S.C. § 101(j)(2), (4). Accessed 2026-09-28.
  3. Internal Revenue Bulletin 2009-24 — Employer-Owned Life Insurance Contracts. Internal Revenue Service; Notice 2009-48, Q&A 6–7; written notice and consent. Accessed 2026-09-28.
  4. How You’re Protected: Coverage Levels by State. National Organization of Life & Health Insurance Guaranty Associations; Coverage Levels by State; life insurance death benefits; report current as of May 2025. Accessed 2026-09-28.
  5. Life and Health Insurance Guaranty Association Model Act. National Association of Insurance Commissioners; Section 8(A)(2)(d), owner aggregate benefit cap. Accessed 2026-09-28.
  6. Department of Insurance and Financial Services. Department of Insurance and Financial Services; Official regulator and insurance oversight. Accessed 2026-09-28.
  7. Insurance License Lookup. Department of Insurance and Financial Services; State-designated producer/company search. Accessed 2026-09-28.
  8. File an Insurance Complaint. Department of Insurance and Financial Services; State complaint process and contact. Accessed 2026-09-28.
  9. Surplus Lines Licensee: Filing the Surplus Lines Taxes. Michigan Department of Insurance and Financial Services; DIFS current filing page: Michigan-home-state placements taxed at 2.5% combined tax and regulatory fee; separate fees charged to insured are not included in premium tax base. Accessed 2026-09-28.
  10. Michigan Insurance Code, Chapter 500. Michigan Legislature; MCL 500.7911(1)-(2), 500.7921(b): association membership tied to insurer authorized to transact; insurer procured solely under Chapter 19 is expressly not authorized for guaranty chapter. Accessed 2026-09-28.
  11. Michigan Insurance Code, Chapter 500. Michigan Legislature; MCL 500.1922 requires policy notice that insurer is not Michigan-licensed and insolvency claim payment may not be guaranteed. Accessed 2026-09-28.
  12. Licenses. At-Bay; Current producer introduction and state table; At-Bay Insurance Services LLC; P&C and surplus-lines identifiers. Accessed 2026-09-21.
  13. Licenses and Carriers. Coalition; Licenses and Carriers, re-read 22 September 2026: Insurance Licenses table for Coalition Insurance Solutions, Inc., national producer number 18419475, with producer and surplus-lines numbers for all 50 states and DC including California 0L76155, Georgia 196479, Texas 2199630 and 2205589, Pennsylvania 815731 and 817452, Colorado 539028 and Wisconsin 3000108852. Insurance Carriers table naming, with NAIC numbers, Allianz Underwriters Insurance Company 36420, Arch Specialty Insurance Company 21199, Ascot Specialty Insurance Company 45055, Ascot Insurance Company 23752, Aspen Specialty Insurance Company 10717, Chaucer Insurance Company DAC, Coalition Insurance Company 29530, Fireman's Fund Indemnity Corporation 11380, Fortegra Specialty Insurance Company 16823, Lloyd's of London, MSIG Specialty Insurance USA Inc. 34886, MS Transverse Specialty Insurance Company 41807, Steadfast Insurance Company 26387, Vantage Risk Specialty Insurance Company 16275 and Zurich American Insurance Company 16535. Accessed 2026-09-22.
  14. Insurance Producer Licenses. Corgi Insurance; Current complete Insurance Producer Licenses table for Corgi Insurance Services, Inc.; 50 rows covering 49 states and DC (DC 3003091619); no New Mexico row; no NPN or as-of date shown. Accessed 2026-09-28.
  15. About Hiscox US Insurance. Hiscox; Hiscox Insurance Company Inc. NAIC 10200 as Chicago, IL domiciled insurer admitted or licensed in all 50 states and D.C.; Hiscox Inc. as general agent and Lloyd’s coverholder for Syndicates 33 and 3624; surplus-lines placements through licensed surplus-lines brokers; A.M. Best rating statement. Accessed 2026-09-16.
  16. Licenses. ERGO NEXT Insurance; Current entity-by-state license table reopened 28 September 2026: 50 rows under Next First Insurance Agency, Inc., including Washington, DC; New York rows instead list Next Insurance Services PC-1423070 and AP Intego BR-1198885. Accessed 2026-09-28.
  17. Insurance Licenses by State. TechInsurance; Current state table; identifies TechInsurance as a division of Specialty Program Group LLC d/b/a SPG Insurance Solutions; lists DC 3000041536 and labels Rhode Island “Individual licenses,” without an agency license number. Accessed 2026-09-28.
  18. Licenses. Vouch; Effective 16 January 2025: Vouch Specialty Insurance Services, LLC, NPN 19926463; P&C table (50 states and DC); surplus-lines table includes Idaho 870820; footnote says Georgia and Idaho do not issue agency-level surplus-lines licenses; Idaho retained as producer-only due to conflict. Accessed 2026-09-15.

Updated .

This guide is informational and does not determine whether a policy is available or meets your needs. Editorial policy. To suggest a correction, contact Spot with a supporting source.

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