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Home / Policy Services / Assignment

Assignment

Types of assignment 

To suit the need of the policyholder, section 38 of the Insurance Act provides two kinds of assignments viz., the conditional and absolute.  The conditional assignment would be useful where the policyholder desires the benefit of the policy to go to a near relative in the event of his earlier death, however, the conditions should be such as not to depend on the will of the assignor.  This kind of assignment is usually effected for consideration of natural love and affection.  Such assignment generally provides for the right to revert to the policyholders in the event of the assignee predeceasing the policyholder or the policyholder surviving to the date of maturity.  The absolute assignments are generally made for valuable consideration. 

This type of assignment has the effect of passing the title in the policy absolutely to the assignee and the policyholder is no way retains any interest in the policy.  Such assignments must clearly mention the consideration involved.  The absolute assignee can deal with the policy in any manner he likes and may assign or transfer his interest to another person.

A policy of life insurance can also be absolutely assigned by way of gift.  It gives better protection to the assignee from other Class I heirs.

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