A policyowner has assigned a $10,000 policy to cover a $5,000 mortgage.
How will the company pay the claim at the insured's death?
The transfer of ownership is referred to as assignment and the new owner is the assignee.
If the policy is transferred under an absolute assignment, the transfer is irrevocable and the assignee receives full control of the policy.
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 a partial assignment was made, the unpaid mortgage balance will be paid to the assignee and the remainder will be paid to the beneficiary named in the policy.aap is the UK's biggest buyer of traded endowment policies (TEPs), and has been involved in the purchase of over £1 billion of with-profit endowments since 1968.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.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.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] an absolute assignment was made, the company will pay the entire proceeds to the assignee.If a collateral assignment was made, the company will usually make the check payable jointly to the assignee and the beneficiary.