THE INSURANCE CODE OF 1956
Act 218 of 1956
500.2207 Insurable interest; personal insurance; rights of beneficiaries, creditors.
Sec. 2207.
(1) It shall be lawful for any husband to insure his life for the benefit of his wife, and for any father to insure his life for the benefit of his children, or of any one or more of them; and in case that any money shall become payable under the insurance, the same shall be payable to the person or persons for whose benefit the insurance was procured, his, her or their representatives or assigns, for his, her or their own use and benefit, free from all claims of the representatives of such husband or father, or of any of his creditors; and any married woman, either in her own name or in the name of any third person as her trustee, may cause to be insured the life of her husband, or of any other person, for any definite period, or for the term of life, and the moneys that may become payable on the contract of insurance, shall be payable to her, her representatives or assigns, free from the claims of the representatives of the husband, or of such other person insured, or of any of his creditors; and in any contract of insurance, it shall be lawful to provide that on the decease of the person or persons for whose benefit it is obtained, before the sum insured shall become payable, the benefit thereof shall accrue to any other person or persons designated; and such other person or persons shall, on the happening of such contingency, succeed to all the rights and benefits of the deceased beneficiary or beneficiaries of the policy of insurance, notwithstanding he, she or they may not at the time have any such insurable interest as would have enabled him, her or them to obtain a new insurance; and the proceeds of any policy of life or endowment insurance, which is payable to the wife, husband or children of the insured or to a trustee for the benefit of the wife, husband or children of the insured, including the cash value thereof, shall be exempt from execution or liability to any creditor of the insured; and said exemption shall apply to insurance heretofore or hereafter issued; and shall apply to insurance payable to the above enumerated persons or classes of persons, whether they shall have become entitled thereto as originally designated beneficiaries, by beneficiary designation subsequent to the issuance of the policy, or by assignment (except in case of transfer with intent to defraud creditors).
(2) If a policy of insurance, or contract of annuity (whether heretofore or hereafter issued) is effected by any person on his own life or on another life in favor of a person other than himself, or (except in cases of transfer with intent to defraud creditors) if a policy of life insurance is assigned or in any way made payable to any such person, the lawful beneficiary or assignee thereof (other than the insured or the person so effecting such insurance, or his executors or administrators) shall be entitled to the proceeds and avails (including the cash value thereof) against the creditors and representatives of the insured and of the person effecting the same, (whether or not the right to change the beneficiary is reserved or permitted and whether or not the policy is made payable in the event that the beneficiary or assignee shall predecease such person, to the person whose life is insured or the person effecting the insurance): Provided, That, subject to the statute of limitations, the amount of any premiums for said insurance paid with intent to defraud creditors, with interest thereon, shall inure to their benefit from the proceeds of the policy: Provided further, That proof that such transfer was made and a particular debt or claim existed at the time of such transfer shall be prima facie evidence of intent to defraud said creditor as to said debt or claim; but the company issuing the policy shall be discharged of all liability thereon by payment of its proceeds in accordance with its terms, unless before such payment the company shall have written notice at its home office, by or in behalf of a creditor of a claim to recover for transfer made or premiums paid with intent to defraud creditors, with specification of the amount claimed.
History: 1956, Act 218, Eff. Jan. 1, 1957
PopularName Notes:
Act 218
Notes of Decisions
Cited in
11
cases (
4 in the last 5 years), 1962–2025 · leading case:
In re Parsons, 161 B.R. 194 (W.D. Mich. 1993).
In re Parsons, 161 B.R. 194 (W.D. Mich. 1993).
· cites it 11× “Treasury raises the same argument as the Trustee and the Wright estate, but in addition asserts that regardless of the interpretation of Mich. Comp.Laws Ann. §§ 500.2207 and 500.”
In Re Johnson, 274 B.R. 473 (Bankr. E.D. Mich. 2002).
· cites it 3× “The Debtor argued that Mich. Comp. Laws § 500.2207 provided for the exemption of the life insurance policies and that Mich.”
Joseph Jack Minc & Karen Esther Minc (Bankr. E.D. Mich. 2025).
· cites it 44× “5451 ; (2) a Michigan statute that exempts certain life insurance benefits, Mich. Comp. Laws § 500.2207 ; and (3) the federal exemption statute that protects social security benefits, 42 U.”
Shapiro v. Sassak, 426 B.R. 680 (E.D. Mich. 2010).
· cites it 13× “In particular, the Court must determine whether Appellee is entitled to claim an exemption for certain life insurance policies, as permitted exemptions under MCL 500.2207. The Bankruptcy Court, Judge Steven W.”
Dc Mex Holdings LLC v. Affordable Land LLC (Mich. Ct. App. 2017).
· cites it 29× “The disclosure also indicated that “[l]ife insurance may be exempt from garnishment under” MCL 500.2207. On January 27, 2016, Fuller filed an objection to the garnishment indicating that the funds were exempt and that the cash value was not owing and did not represent a debt.”
Dc Mex Holdings LLC v. Affordable Land LLC (Mich. Ct. App. 2017).
· cites it 29× “The disclosure also indicated that “[l]ife insurance may be exempt from garnishment under” MCL 500.2207. On January 27, 2016, Fuller filed an objection to the garnishment indicating that the funds were exempt and that the cash value was not owing and did not represent a debt.”
Baltrusaitis v. Cook, 435 N.W.2d 417 (Mich. Ct. App. 1988).
“12207, which provides in relevant part: It shall be lawful for any husband to insure his life for the benefit of his wife, and for any father to insure his life for the benefit of his children, or of any one or more of them; and in case that any money shall become payable under…”
In Re Jennifer L Fowler Est. (Mich. Ct. App. 2024).
· cites it 13× “See MCL 500.2207. Retirement plan benefits paid to the revocable trust or other named beneficiaries may be exempted by MCL 600.”
In Re Williams Est. (Mich. Ct. App. 2022).
· cites it 9× “Appellant contended that, although Australian law permitted the trustee to decline to pay the death benefit to preferred beneficiaries, Michigan law did not allow such discretionary payment of benefits and, pursuant to MCL 500.2207, the estate was obligated to pay the death…”
In Re Williams Est. (Mich. Ct. App. 2022).
· cites it 9× “Appellant contended that, although Australian law permitted the trustee to decline to pay the death benefit to preferred beneficiaries, Michigan law did not allow such discretionary payment of benefits and, pursuant to MCL 500.2207, the estate was obligated to pay the death…”
Morris v. Massachusetts Mut. Life Ins., 117 N.W.2d 138 (Mich. 1962).
· cites it 2× “Plaintiff relies, with reference to this question, upon section 2207 of the insurance code of 1956 (OLS 1956, § 500.2207 [Stat Ann 1957 Rev § 24.12207]), which reads in pertinent part as follows: “Provided, That, subject to the statute of limitations, the amount of any premiums…”
— Mich. Comp. Laws § 500.2207(1) — 5 cases
Dc Mex Holdings LLC v. Affordable Land LLC (Mich. Ct. App. 2017).
“The disclosure also indicated that “[l]ife insurance may be exempt from garnishment under” MCL 500.2207. On January 27, 2016, Fuller filed an objection to the garnishment indicating that the funds were exempt and that the cash value was not owing and did not represent a debt.”
Dc Mex Holdings LLC v. Affordable Land LLC (Mich. Ct. App. 2017).
“The disclosure also indicated that “[l]ife insurance may be exempt from garnishment under” MCL 500.2207. On January 27, 2016, Fuller filed an objection to the garnishment indicating that the funds were exempt and that the cash value was not owing and did not represent a debt.”
Baltrusaitis v. Cook, 435 N.W.2d 417 (Mich. Ct. App. 1988).
“12207, which provides in relevant part: It shall be lawful for any husband to insure his life for the benefit of his wife, and for any father to insure his life for the benefit of his children, or of any one or more of them; and in case that any money shall become payable under…”
In Re Jennifer L Fowler Est. (Mich. Ct. App. 2024).
“See MCL 500.2207. Retirement plan benefits paid to the revocable trust or other named beneficiaries may be exempted by MCL 600.”
Joseph Jack Minc & Karen Esther Minc (Bankr. E.D. Mich. 2025).
“5451 ; (2) a Michigan statute that exempts certain life insurance benefits, Mich. Comp. Laws § 500.2207 ; and (3) the federal exemption statute that protects social security benefits, 42 U.”
— Mich. Comp. Laws § 500.2207(2) — 3 cases
In Re Jennifer L Fowler Est. (Mich. Ct. App. 2024).
“See MCL 500.2207. Retirement plan benefits paid to the revocable trust or other named beneficiaries may be exempted by MCL 600.”
In Re Williams Est. (Mich. Ct. App. 2022).
“Appellant contended that, although Australian law permitted the trustee to decline to pay the death benefit to preferred beneficiaries, Michigan law did not allow such discretionary payment of benefits and, pursuant to MCL 500.2207, the estate was obligated to pay the death…”
In Re Williams Est. (Mich. Ct. App. 2022).
“Appellant contended that, although Australian law permitted the trustee to decline to pay the death benefit to preferred beneficiaries, Michigan law did not allow such discretionary payment of benefits and, pursuant to MCL 500.2207, the estate was obligated to pay the death…”
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