If a problem arises during the course of the policy term, the insured needs to know how to proceed. Assignment is a solution to this problem. Easy-to-use forms enable assignment to be made easily. There are customized forms available for use with any insurance contract which enable a person to transfer an active insurance policy as collateral.
Chandu Lal*, a policyholder, called on me seeking professional advice on his life insurance policies. His problem was quite unique. He had his wife and two children as his dependents. For their benefit, he had insured his life for quite a high sum, assured through four life insurance policies, taken at different points of time. In all the policies, his wife was the nominee.
One insurance agent told him that nomination does not guarantee that the policy money would be available to his children in the event of his unfortunate death. He was fighting a divorce petition with his wife in a family court. He had enormous debt and if something unfortunate happened, he feared his property might be taken over by his creditors.
The policyholder wanted proper advice so that the policy money would be secured for his children in the event of his death. If nothing unfortunate happens, of course, the money should be available to him on his survival after the specified period or maturity of the policies. Obviously, the advice was to go for a `conditional assignment' of the life insurance policies. The advice was put into effect immediately. |
