diff --git a/src/compiler/checker.ts b/src/compiler/checker.ts
index b0c22b61341..394f13bc2cc 100644
--- a/src/compiler/checker.ts
+++ b/src/compiler/checker.ts
@@ -11976,19 +11976,21 @@ namespace ts {
                         bestMatch = target;
                         matchingCount = Infinity;
                     }
-                    else if (overlap.flags & TypeFlags.Union) {
-                        // Some subset overlap if we have only string literals.
+                    else if (isLiteralType(overlap)) {
+                        // We only want to account for literal types otherwise.
                         // If we have a union of index types, it seems likely that we
                         // needed to elaborate between two generic mapped types anyway.
-                        const len = length((overlap as UnionType).types);
-                        if (len >= matchingCount) {
-                            bestMatch = target;
-                            matchingCount = len;
+                        if (overlap.flags & TypeFlags.Union) {
+                            const len = length((overlap as UnionType).types);
+                            if (len >= matchingCount) {
+                                bestMatch = target;
+                                matchingCount = len;
+                            }
+                        }
+                        else if (1 >= matchingCount) {
+                            bestMatch = target;
+                            matchingCount = 1;
                         }
-                    }
-                    else if (!(overlap.flags & TypeFlags.Never) && 1 >= matchingCount) {
-                        bestMatch = target;
-                        matchingCount = 1;
                     }
                 }
                 return bestMatch;