Which of the following statements regarding Len's policy surrender is incorrect?

The statement that the insurer may decide to pay the cash value either in a lump sum or monthly installments is incorrect in the context of a policy surrender. When a policy is surrendered for its cash value, the standard procedure is that the insurer provides the policyholder with a payment of the cash surrender value usually in a lump sum.

Policies typically state that the cash surrender value is payable in a single payment upon surrender unless the policyholder has made a prior arrangement for a different method of payment. However, this is not a customary practice for the surrender of the policy itself; the choice of monthly installments may apply in other contexts, such as loan options or certain types of annuities but not specifically for the cash surrender value upon policy cancellation.

Understanding this helps clarify that while some policies or financial products might allow for alternative payment arrangements, cash surrender payouts are predominantly lump-sum payments to facilitate a straightforward and final resolution of the policy's active status.