What is the definition of Assignment?

For life insurance policies, an assignment refers to the transfer of the benefits and proceeds of the policy to another person or entity. The policy owner signs off the rights and claims to the policy to someone else (usually a creditor). The person who accepts the transfer is called an assignee. If the insured person dies while the assignment is in place, the assignee will receive a portion of the death benefit.

For example, John transfers his life insurance policy (which has a coverage of $50,000) and assigns it to Credit Company A (to whom John owes $30,000). If John dies during the time that the life insurance policy is assigned to Credit Company A, the company will receive the $30,000 that John owes to them. The rest of the balance ($20,000) is given the John's beneficiaries.

• Businessowners Policy / BOP
• Competitive State Fund
• Excess and Surplus Lines
• Employer’s Liability
• Blanket Insurance