Assignment of Life Insurance

 

life insurance assignment

This form permanently transfers ownership of your FEGLI insurance to another individual, trustee, or corporation (however, premiums continue to be withheld from your salary/annuity). An assignment is irrevocable, and cannot be changed later. DO NOT USE THIS FORM if you only wish to designate a beneficiary to receive your life insurance. Assignment of a Life Insurance Policy simply means transfer of rights from one person to another. The policyholder can transfer the rights of his insurance policy to another for various reasons and this process is called Assignment. Absolute Assignment. When you make an absolute assignment, the rights, title and interest in the life insurance policy pass on to another party without the possibility of reversal.


The Collateral Assignment of a Life Insurance Policy


Learn something new every day More Info An assignment of insurance is a process that is used to temporarily transfer or assign the benefits associated with some type of insurance plan.

The most common example of this type of assignment is found with whole- life insurance polices when the cash value of the policy is used for collateral on a loan. For the duration of the loan, the lender has a claim on that cash value as well as the overall benefits of the plan up to the balance due on the loan. With an assignment of insurance, the lender who accepts this arrangement as collateral for a loan has the primary claim on any proceeds that are paid on the life insurance plan in the event that the debtor should pass away life insurance assignment the loan is settled in full.

Upon notification that the debtor has passed away, the lender invokes the assignment of insurance by filing a claim with the life insurance assignment company, ultimately receiving whatever amount of the life insurance benefits is necessary to pay off the outstanding balance due.

Any remaining balance left after the debt is settled is then provided to the beneficiary designated by the policyholder, life insurance assignment. One of the benefits provided by an assignment of insurance is the ability to secure a loan without the need to pledge other assets, such as a home.

Depending on the amount of cash value present in the policy as well as the total amount of life insurance involved, life insurance assignment, this approach may also be preferable to some lendersin that disbursements from the insurance company will often be easier than going through the necessary steps to gain control of property and sell it in order to settle a debt.

Life insurance assignment the debtors, the ability to use the insurance as collateral means that it is still possible to use other assets as desired, including selling them if necessary. Life insurance assignment an assignment of insurance is possible with various types of life insurance plans, life insurance assignment, this particular provision is usually not possible with other forms of insurance.

Even within the scope of life insurance coverage, this type of strategy is normally life insurance assignment with whole-life policies and not with term insurance plans. The ability to make use of a life insurance plan as part life insurance assignment the collateral for a loan will vary, life insurance assignment, based on the lending laws and regulations that apply in the jurisdiction where the loan is granted. Even within the scope of those regulations, some lenders will not accept an assignment of insurance as a means of securing a personal or business loan.

One of our editors will review your suggestion and make changes if warranted. Note that depending on the number of suggestions we receive, this can take anywhere from a few hours to a few days. Thank you for helping to improve wiseGEEK!

View slideshow of images above. Watch the Did-You-Know slideshow. Follow wiseGEEK. Did You Know? People tend to drink more quickly and order a larger number of drinks when they are in a bar with loud music. This Day in History. You might also Like. What Is Cash Value? What Is an Assignment of Proceeds? What Is an Life insurance assignment Clause? What Is an Assignment of Claims?

What is Sex Reassignment Surgery? Discuss this Article Post your comments. Please enter the code:. Login username password forgot password? Register username password confirm email, life insurance assignment. Optional: Explanation of your recommended changes. Thank You!

 

What Is a Life Insurance Assignment? | Finance - Zacks

 

life insurance assignment

 

Life insurance absolute assignment. Use this form to name a new absolute Assignee (Owner). The Company indicated in this section is referred to as "the Company." Metropolitan Life Insurance Company. Metropolitan Tower Life Insurance CompanyThings to know before you begin. Assignment of a Life Insurance Policy simply means transfer of rights from one person to another. The policyholder can transfer the rights of his insurance policy to another for various reasons and this process is called Assignment. This form permanently transfers ownership of your FEGLI insurance to another individual, trustee, or corporation (however, premiums continue to be withheld from your salary/annuity). An assignment is irrevocable, and cannot be changed later. DO NOT USE THIS FORM if you only wish to designate a beneficiary to receive your life insurance.