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
Regulation set forth by the national association of insurance commissioners (naic) to govern life insurance sales illustrations. Includes the following major provisions: POLICY OWNER must ...
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Coverage in which premiums are collected monthly on an ordinary life insurance policy. ...
Provision applied as a rider attached to an ordinary life insurance policy for the purpose of meeting estate planning requirements. When the insured dies, the beneficiary is entitled to ...
Classification of occupations according to the degree of risk inherent in that occupation. ...
Analysis of uncertainty of financial loss. This classification can be according to whether a risk is fundamental, particular, pure, speculative, dynamic, or static. In life insurance the ...
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Benefits payable under any insurance policy or annuity contract. ...
Plan under which life insurance is substituted for retirement income. Under the plan, a married individual selects a single life annuity payout from the pension plan, which will generate ...
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