Absolute Assignment
Same as term Assignment Clause: feature in a life insurance policy allowing a policyowner to freely assign (give, sell) a policy to another or institution. For example, in order to secure a loan, a bank asks to be assigned the policy. If the insured dies before repayment of the loan, the bank would receive a portion of the death benefit that equals the outstanding loan, the remainder of the death benefit being payable to the insured's beneficiary. The fact that life insurance is freely assignable makes it a useful financial instrument through which to secure a loan. The insurance company does not guarantee the validity of the assignment.
Popular Insurance Terms
Value of a foregone opportunity, one rejected in favor of a presumably better opportunity. For example, investment of a sum into a mutual fund instead of a variable annuity with a ...
Effective proprietor of a business. Under the tax reform act of 1986, a uniform accrual rule prevents a qualified pension plan from being weighted in favor of the substantial owner of the ...
Same as term cash surrender value: money the policyowner is entitled to receive from the insurance company upon surrendering a life insurance policy with cash value. The sum is the cash ...
Means of setting life insurance reserves based on expected mortality rates as reflected in a mortality table. ...
Addition to a workers compensation insurance policy to cover payments to injured employees who are not covered by a state's workers compensation law. This endorsement provides employees who ...
Change in the nature of an employer or other organization that sponsors a qualified pension plan. A qualified plan must guarantee vested benefits due to participants in the event of a ...
Risk that premiums and reinsurance, as well as other receivable instruments, will not be collected. ...
Employee's right to transfer pension benefit credits from a former employer to a current employer. ...
Automatic right of an insured to renew a policy until a given date or age except under stated conditions. It is extremely important for the purchaser to review the conditions for renewal in ...
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