what is assignment in insurance

anniebr33

In insurance, an assignment is the legal transfer of a policy's ownership, rights, and benefits from the original owner (assignor) to another person or entity (assignee). This is different from nomination, as the assignee becomes the new owner, not just a recipient of benefits, often used to secure loans (like a bank receiving proceeds) or for estate planning, completely removing the assignor's control over the policy's proceeds. 

megatelcnc

In insurance, an assignment means the transfer of rights or benefits of an insurance policy from one person to another.

Simple explanation:
When the policyholder gives the right to receive policy benefits to someone else, it is called assignment.

Example:
If you assign your life insurance policy to a bank while taking a loan, the bank gets the right to receive the claim amount if something happens to you.

Key points:

• The person transferring the policy is called the assignor
• The person receiving the rights is called the assignee
• Assignment is usually done in writing
• Common in life insurance policies