Burial contracts in Michigan conversion cases prior to January 1, 1974, which were
approved by DHS, are irrevocable. Prepaid burial agreements dated January 6, 1979
or later, which are approved by DHS are irrevocable.
The State irrevocable limit was $1,500 plus interest prior to March 6, 1984. On March
6, 1984, the State raised the irrevocable limit to $2,000 plus interest. Effective
June 1, 2002, the State raised the limit to $10,050, plus interest. This amount is
the sum of the original $2,000 limit and the amount allowed under section 2080 of
the Michigan insurance code ($8,050 effective June 1, 2002). The amount allowed by
the Michigan insurance code is adjusted annually in accordance with the consumer price
index. (CPI). The total amount was increased to $10,257 effective June 1, 2003; to
$10,423 effective June 1, 2004; to $10,560 effective June 1, 2005; to $10,808 effective
June 1, 2006; to $11,072 effective June 1, 2007; and to $11,238 effective June 1,
2008. We expect this amount to change annually, consistent with any increases in the
CPI. Interest and dividends may be added to the account in excess of the limit and
are not available to the individual.
Effective June 1, 2002, the amount that DHS can certify as irrevocable is reduced
by the amount of a death benefit from an insurance policy or annuity contract, the
proceeds of which have been assigned as payment for funeral goods or funeral services
for the contract beneficiary. The limit on such a policy or contract was $10,050 effective
June 1, 2002; $10,257 ($8,257 plus $2,000); $10,423, effective June 1, 2004; $10,560
effective June 1, 2005; $10,808 effective June 1, 2006; $11,072 effective June 1,
2007; and $11,238 effective June 1, 2008, all exclusive of interest. This amount is
also indexed to the CPI. See SI R01130.425 (MI) for additional information about life insurance funded burial contracts and
trusts in Michigan.