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What Is Assignment Of Insurance Policy?
Assignment of Insurance Policy for Loan means a complete transfer of the ownership of the policy to some other person. Usually, an assignment is done for the purpose of raising a loan from a bank or a financial institution. The policy would be reassigned to you on the repayment of the loan (under conditional assignment). Types of insurance policies used for assignment purposes to get business loans, generally include an endowment plan, a money-back policy or a ULIP. Home loan providers generally ask for the assignment of Term insurance plans in their names.
There are 2 types of Assignment of Insurance Policies for Loa:
1. Absolute Assignment – This means a complete Transfer of Rights from the Assignor to the Assignee, without any further conditions applicable.
2. Conditional Assignment – This means that the Transfer of Rights will happen from the Assignor to the Assignee subject to certain conditions. If the conditions are fulfilled then only the Policy will get transferred from the Assignor to the Assignee.
FAQ’s for Assignment Of Insurance Policy
Q1. Is an insurance policy assignable?
Ans – Interest in a life insurance policy can be transferred from the policyholder to a lender or relative by assignment of the policy. Here the policyholder is known as the assignor and the person in whose favor the policy has been assigned is called the assignee.
Q2. What is the importance of Assignment of Insurance Policy for Loan?
Ans – Assignment of a Life Insurance Policy simply means the 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.
Q3. What is the process of assigning?
Ans – Assigned Process means any process, method, procedure, or service necessary for research, development, manufacture, or commercialization activity, the practice of which falls within the limitations of an issued, unexpired claim of the Patent Rights.
ASSIGNMENT OF INSURANCE POLICY FOR LOAN SAMPLE FORMAT
KNOW ALL MEN BY THESE PRESENTS that I, AA., aged about_________ years,
Son of ___________________________,
Resident of ________________________,
in consideration of value received do hereby assign and transfer and set over unto DE., aged about _________ years,
Son of ___________________________,
Resident of _______________________,
all my rights, title and interest including the right to exercise any and all options, rights and privileges in and to the Policy bearing No. ____________________________, issued to me by _________________ and all moneys payable thereunder. The said policy is hereby delivered to the said DE. and I do hereby further undertake to have this transfer and assignment registered with the said ______________ immediately hereinafter.
This assignment is made for securing the due repayment of my loan on the basis of the pronote executed by me on ________________, in favour of the said DE. and on which said loan the sum of Rs ________________inclusive of all interest at the stipulated rate of _________ per cent per annum is due to the said DE. and for the repayment of all further interest as may accrue and remain unpaid.
If I default in the payment of the said loan or any portion thereof and any sum remains due after the period of _________ years from date then this assignment shall stand and be enforceable, otherwise it shall be void and the said DE. shall on the repayment of the loan return the said policy to me according to my directions in this behalf.
IN WITNESS whereof, I, the said AA., have hereunto signed at ______ this the______ day of ________ in the year 20_________
Witness:
Assignor.
I, DE., the above-named assignee accept the above assignment on the terms and conditions embodied herein.
Witness:
Assignee.
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