Thus, in that case, he would like to perform Absolute Assignment of the policy in Ajay’s name such that the death or maturity proceeds are directly paid to him.
After the assignment is executed, Ajay becomes the absolute owner of the policy.
If he wishes, he may again transfer it to someone else for any other reason.
This type of Assignment without any further clauses attached to it is called Absolute Assignment.
Example in real life of Absolute Assignment happens in case of an Insurance Policy being taken by the employer as a perquisite for the employee.
If your policy has a cash value and you fail to repay the loan, the lender can cash out the policy to recover the money owed.
Should you die before repaying the loan, your insurance company will pay the lender a certain amount of money to cover the debt.Just as there are many questions when considering whether to get term insurance or whole life insurance, there are also a lot of factors to consider if you choose to use your policy to access the cash you’ve invested in it.It’s important to understand terms like absolute assignment and collateral assignment, as well as weigh the differences, in order to satisfy your particular financial needs.Thus, instead of paying the employee cash, they purchase an insurance policy in their name and add it to their Annual Income Package.Through absolute assignment of a life insurance policy, you turn all of the rights, liabilities, and benefits that come with your policy over to another party.Because life insurance benefits are fully assignable, you could assign them to anyone, including a business.Using Absolute Assignment in a Loan Agreement If you have a life insurance policy, you could assign the policy over to a lender as collateral for a loan.Once the policy is purchased, it is transferred to the employee’s name under Absolute Assignment clause.Hence the employee becomes the owner of the policy, but the employer pays for it till the end.We are currently seeking to purchase policies maturing in 2015 and beyond with a surrender value in excess of 7,000.If your policy matches this criteria, please call 44 (0) 20 8731 5290 where your details will be taken by a member of the Valuations team or alternatively please email us at [email protected]