Assignment of a life insurance policy - 6

A absolutely assigns his life insurance policy to B. B, later assigns the policy to A. B has done a reassignment. That is, B has assigned the policy to the original assignor.

If B assigns the policy to C it is not called reassignment. It is only an assignment, where B is the assignor and C s the assignee. All the rights and liabilities possessed by B are transferred to C.

The immediate effect of assignment is that it cancels ‘nomination’ in the policy. However this has one exception. If the assignment is made:

1. against a loan granted from within the surrender value of the policy;
2. loan is granted by a life insurer; and
3. that life insurer shall bear the risk on the life covered in the policy.

The assignment of an LIC policy against a housing loan granted by LIC cancels nomination (housing loan is not from within sv). Assignment of an LIC policy to Central Bank against a loan granted from within the surrender value cancels nomination (because CB in not insurer). If ICICI Prudential gives a loan on your LIC policy from within the surrender value, and the LIC policy is assigned to ICICI Prudential, it cancels nomination (ICICI Pru does not bear risk on the life).