google bot detected Collateral Assignment | Insurance Glossary | Realestateagent.com

Collateral Assignment


Definition of "Collateral assignment"

Shannon Damschen
  Keller Williams Realty

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.



Related Real Estate Glossary terms

Related Real Estate FAQ