A Massachusetts policyholder elects to surrender her life policy for its cash surrender value. Under M.G.L. c. 175, § 132(9) and § 142, how long may the insurer defer paying the surrender proceeds?

Why D is correct

M.G.L. c. 175, § 132(9) together with § 142 allows the Massachusetts insurer to defer payment of a cash surrender value for up to six months from the date of the election to surrender. The deferral is a liquidity protection for the insurer — surrender values may be invested in longer-term assets — but it is strictly bounded. When the policyholder elects surrender, payment must come no later than six months out; the insurer cannot hold the funds indefinitely.

Why the other options are wrong

• A) 12 months doubles the statutory cap; the deferral runs at most six months from the election with surrender.
• B) 18 months is a Mini-COBRA duration with no application to surrender deferrals under M.G.L. c. 175, § 132(9).
• C) The clock runs from the election to surrender, not from a policy anniversary, and the cap is six months rather than three.

Memory hook

Six months is the outer limit for both loans and surrenders in Massachusetts.