What Is Assignment in Life Insurance Policy?

What Is Assignment and Assignee in Life Insurance Policy?

What Are the Types of Assignment in Life Insurance Policy?

FAQs about Assignment in Life Insurance Policy:

Does the policy risk get transferred in the assignment process? up-arrow

No, the assignment of life insurance only involves the transfer of the policy ownership. That means the original policyholder will continue to be the person insured. Moreover, if they fulfil the conditions (in a conditional assignment), the policy will transfer back to them as before.

What is an endorsement in an assignment? up-arrow

An endorsement is a document that you (the policyholder) have to sign while transferring your policy rights to an assignee. It also requires the signature of one witness. After this, you will need to mention the reason for the assignment, along with the conditions (if any). Moreover, further details of the assignee also have to be mentioned.

What are the liabilities and rights of the assignee? up-arrow

The liabilities of an assignee vary based on the assignment you choose. For instance, your assignee will be responsible for paying future premiums in an absolute one. Also, the right to get maturity benefits will be transferred to them. On the other hand, for conditional assignment, the liabilities and the rights of your assignee will depend on the specified terms and conditions.