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
New rule entitled "Employers Accounting for Postemployment Benefits," which requires advanced recognition of nonretirement benefits, health insurance continuation, and severance pay. ...
Means of setting life insurance reserves based on expected mortality rates as reflected in a mortality table. ...
Rules that insurance companies must follow in filing an annual financial statement known as the convention blank, with state insurance departments. The reported financial condition of an ...
Nominal interest rate minus the rate of inflation. ...
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Type of term life insurance policy that has a face amount that increases to a predetermined sum and then decreases to zero at the termination point of the policy, while at the same time ...
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