How long may an insurer defer a loan request from a policyholder?

An insurer is permitted to defer a loan request from a policyholder for a maximum of six months. This provision is often included in life insurance policies to protect the insurer from immediate financial strain caused by a sudden influx of loan requests. During this deferment period, the insurer may continue to assess the overall financial situation of the policy or ensure that the policy is in good standing before allowing the loan to be processed. This time frame strikes a balance between providing the policyholder with access to their policy’s cash value while also maintaining the insurer's financial stability. Other options exceeding six months, such as one year or two years, are not in alignment with the standard regulations governing life insurance policies.