How long can an insurer delay the payment when a policyowner surrenders the cash value of a whole life insurance policy?

When a policyowner surrenders the cash value of a whole life insurance policy, Arizona law allows the insurer to delay payment for a maximum of six months. This period is specified to provide the insurer with adequate time to process the request, ensure all necessary documentation is completed, and manage any financial implications that may arise from the surrender.

The six-month timeframe is established to balance the interests of the policyowner with the operational realities insurers face when handling such transactions. During this period, the insurer must also communicate clearly with the policyowner about the status of the surrender request and any relevant conditions or deductions that may apply to the cash value.

Understanding this rule is crucial for policyowners, as it sets clear expectations about when they can expect to receive the funds, allowing for better financial planning and assurance in their financial dealings with the insurance company.