State RegulationsMA specificDifficulty 2/5
Which statement correctly distinguishes the deferral rules for policy loans and cash surrenders under Massachusetts law?
Select an option to reveal the answer and the full 3-part explanation — free, no signup.
Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
Massachusetts law sets parallel six-month deferral ceilings with different starting points. Under M.G.L. c. 175, § 132(9) and § 142, the insurer may defer granting a policy loan for up to six months from the written application (except a loan to pay premiums), and it may defer paying a cash surrender value for up to six months from the election to surrender. Both deferrals protect the insurer's liquidity while bounding the delay, and both run from the policyholder's own initiating act rather than from any anniversary date or court proceeding.
Why the other options are wrong
- A) The statute expressly permits a six-month loan deferral; what it forbids is deferring a loan made to pay premiums.
- B) The ceilings are six months, not one year, and the clocks run from the application and the election, not from a policy anniversary.
- C) No court order is needed for either deferral; both are statutory rights of the insurer within the six-month limits.
Memory hook
Six months each, but the clocks start differently: application for loans, election for surrenders.