Page 38 - IC24 LEGAL ASPECTS OF LIFE ASSURANCE

wish to gift it to someone. While taking a loan, you assign the

policy to the bank and the bank becomes the owner of the

policy, but the life assured in the policy is the policyholder, so

that even if the original policyholder (assignor) dies, the bank

can get the death benefit to recover the loan. So, the life

insurance policy will serve as a collateral for taking up the loan

from the bank.

What are the types of Assignments?

There are two types of assignments which can be done:

1. Absolute Assignment - Absolute assignment means the

complete assignment of the ownership, benefits, liabilities

under the life insurance policy from assignor to assignee

without any terms and conditions. No conditions are applicable

in the absolute assignment. Once the policy which is assigned