July 23, 2021

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About Assigning Life Insurance Policy


The insured person needs to endorse the policy document or make a deed of assignment and register the policy with the insurer.

Interest in a life insurance policy can be transferred from the policyholder to a lender or a relative by policy assignment. In this case the policyholder is called as the assignor and the person, for whom the policy has to been assigned is called assignee.

Assignment Types
There are two types of assignments – Conditional Assignment and Absolute Assignment.

  1. Conditional Assignment :
    Conditional Assignment is done when the insured person is willing to pass the benefits of the policy to the relative in case of early death or certain conditions. The rights of the policyholder are restored once the conditions are fulfilled.
  2. Absolute Assignment :
    Absolute Assignment is made as a part of consideration for a loan in favour of the lender or bank or lending institution. In this of assignment, the insured person loses his rights in the policy and the absolute assignee can deal with it independently.

Assignment Notice
The insured person needs to either endorse the policy document or make a deed of assignment and register that with the insurer. A form prescribed by the insurers should be filled and signed by the policyholder. In the conditional assignment, the reason also has to be mentioned.

Documents Required
Income Proof certificate.
The Self attested copy of photo ID and address proof.
And the Self attested copy of PAN card.

If the assignment is done by endorsement on the policy document, it is exempt from the stamp duty. If the assignment is on a separate deed, stamp duty is payable.

If the insurance company decides to register the policy assignment, it will record the assignment and inform the assignor. The assignee can obtain an acknowledgement after paying the fee.

The insurer has the right to reject the policy assignment, if it believes that the assignment is not bonafide or against the policyholder interest or against the public interest or for against the purpose of trading the insurance policy.