Collateral Borrower
Individual who assigns rights to a benefit. For example, a life insurance policy may be assigned as security for a loan made by the borrower. The policy protects the collateral creditor (assignee) if the borrower does not pay the loan when due. If a loan remains unpaid at the death of an insured, the loan balance is subtracted from the death benefit and paid to the creditor, with the balance going to the insured's beneficiary. On the other hand, if the insured (the borrower) does not pay the loan when due, the creditor can withdraw the amount due from the cash value of the policy. When a loan is repaid, the assignment ends and the policy owner is again vested with all rights to the policy.
Popular Insurance Terms
Largest property and casualty insurance company trade association in the world (international membership)whose objectives include the service of its membership through positive legislation ...
Plan that combines the simplicity and flexibility of the traditional profit-sharing plan with the best features of the defined benefit plan and the target benefit plan. By age-weighing the ...
Coverage that provides two types of benefits, disability income (DI) and medical expenses. Sold by insurance companies whose business objective is the profit motive (as distinct from Blue ...
In the insurance field, we have insurance companies, which is where every individual or company goes to get insurance policies, and then there are reinsurance companies. Now, you might ask ...
Experience as it relates to the annual costs associated with a pension plan. In calculating premiums due under a pension plan, basic assumptions must be made concerning future loss ...
Termination of a contractual obligation for immediate performance. For example, under the homeowners insurance policy, if the insurer refuses to pay a claim, the insured (if not satisfied ...
Coverage for additional buildings on the same property as the principal insured building. Most property insurance contracts such as the homeowners insurance policy cover appurtenant ...
In health insurance, the applicable average rate charged for a semiprivate room in the geographical area in which the charge is incurred. ...
Endorsement to an existing policy or a separate policy covering loss of rental income to the property owner, caused by the damage or destruction of a building, rendering it unrentable. The ...
Have a question or comment?
We're here to help.