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As long as the beneficiary was not designated as an irrevocable, the assignee can even change the beneficiary without the beneficiary's permission.
Once the policy is purchased, it is transferred to the employee’s name under Absolute Assignment clause.
Hence the employee becomes the owner of the policy, but the employer pays for it till the end.
Just as there are many questions when considering whether to get term insurance or whole life insurance, there are also a lot of factors to consider if you choose to use your policy to access the cash you’ve invested in it.
It’s important to understand terms like absolute assignment and collateral assignment, as well as weigh the differences, in order to satisfy your particular financial needs.
If the insured dies before the debt is repaid, the balance of the debt is paid to the creditor out of the policy proceeds.
If there are any funds left once the debt has been satisfied, the rest of the proceeds go to the policy's beneficiary.
This type of Assignment without any further clauses attached to it is called Absolute Assignment.
Example in real life of Absolute Assignment happens in case of an Insurance Policy being taken by the employer as a perquisite for the employee.
Yet before you use this technique, carefully consider the ramifications of risking your life insurance policy for a loan.
Since the policyowner actually owns the policy, not the insurer, the owner has every right to give the policy away just like any other owned piece of property; the insurer's permission is not required.