Collateral Assignment
Definition of "Collateral assignment"
Designation of a policy's death benefit or its cash surrender value to a creditor as security for a loan. If the loan is not repaid, the creditor receives the policy proceeds up to the balance of the outstanding loan, and the beneficiary receives the remainder. Because life insurance is freely assignable it is readily acceptable to lending institutions as security. Also, the lender is certain to receive the money should death strike the borrower before the loan can be repaid.
Popular Insurance Terms
Classification at death of all pension plans, profit-sharing plans, individual retirement accounts (IRAS), annuities, and installment payments to the extent to which the deceased was ...
Method of underwriting insurance in which the insurance company utilizes regular mortality tables without additions for abnormalities. ...
Insurance with two types of policies available: depositors forgery insurance; forgery and alteration. ...
Principle of equity in property, casualty, and health insurance. When two or more policies apply to the loss, each policy pays its part of the loss, unless its terms provide otherwise. For ...
Process in life insurance by which an applicant who is uninsurable, or is a greater than average risk, seeks to obtain a policy from a company at a standard premium rate. Life insurance ...
Nonparticipating life insurance under which the first few annual premiums are smaller than would be the case under a traditional nonparticipating policy. While the maximum amount of these ...
Group that monitors government health insurance programs. Authorized by the 1972 amendment to the Social Security Act, PSROs were set up to cut costs and minimize abuses by checking on the ...
Coverage for defense costs incurred in defending a company from an unfriendly takeover attempt. Hostile takeovers have been one of the hottest business topics in recent years. Vulnerable ...
Financial technique for providing term death coverage for an entity. With this procedure: (1) an individual purchases an ordinary life insurance policy and completes an agreement with the ...
Have a question or comment?
We're here to help.