What is the maximum time a life insurance policy can delay payment of cash surrender value?

In Arizona, the law states that a life insurance policy can delay the payment of cash surrender value for a maximum of six months. This regulation is in place to ensure that policyholders can access their funds without undue delay while also allowing the insurer to manage the payout effectively.

Understanding this timeframe is important for both consumers and insurance professionals, as it sets a clear expectation for when a policyholder can receive what they are entitled to upon surrendering their policy. Six months serves as a balance between the insurer's need to assess and process the claim and the policyholder's right to access their cash value. This critical rule helps maintain fairness in the insurance process while providing protection to both parties involved.