• Assignment involving part of the policy is considered bad in law.• As regard it’s effectiveness against the insurer, it is only when the notice is delivered.If the insured dies before the debt is repaid, the balance of the debt is paid to the creditor out of the policy proceeds.
• Assignment involving part of the policy is considered bad in law.• As regard it’s effectiveness against the insurer, it is only when the notice is delivered.If the insured dies before the debt is repaid, the balance of the debt is paid to the creditor out of the policy proceeds.Tags: Teacher Essay WritingCreative Writing Starters SentencesTravelling Means Of Education EssayRay Scott Crawford DissertationShort Essay On Poverty ReductionHomework Help EnglishWhere Are You Going Where Have You Been Research Paper
Lenders widely accept life insurance as collateral because of the guaranteed funds, so if the worst happens, they’re still going to get repaid.
Let’s take a look at the collateral assignment of a life insurance policy and see how it works.
He need not take any instructions or a consent from the assignor.
Assignee can assign the policy further to another person. • Assignee can reassign the policy back to the assignor. There are two types of Assignment : • Absolut Assignment • Conditional Assignment In Conditional Assignment, the rights in the policy revert to the assignor on happening of the specified condition.
• A joint life policy can be assigned in which case the assignment will be jointly executed. Effect of Assignment An assignment changes the title to the policy.
All rights, title and interest of the assignor in the policy are transferred to the assignee. By virtue of assignment, he is absolute owner of the policy.
Examples : Specified condition can be that if the assignee predeceased the life assured or the life assured survives the date of maturity, the assignment will become ineffective and all rights, title and interest in the policy revert to the life assured.
Policy on another person’s life • When a person buys policy on the life of another, all rights, title and interest in the policy vest in the buyer.
• Assignee is not free from assignor’s contractual obligations under the policy.
• Assignee can deal with the policy in any manner he/her likes.