process of absolute assignment

Understanding Life Insurance Assignments: Your Complete Guide

A life insurance assignment allows you to transfer the rights of your policy, either temporarily or permanently.

Learn how collateral and absolute assignments can be used for loan collateral, estate planning, and other financial purposes.

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What is a collateral assignment.

Collateral assignments are used to secure a lender’s financial interest in your policy in exchange for lending you money.

If you die, the collateral assignment allows the lender to collect your policy’s death benefit up to the amount of the outstanding loan balance.

How Do Collateral Assignments Work?

A typical scenario involves taking out a business loan .

The lender may require a life insurance policy as collateral.

The type of life insurance policy used, whether a term, whole life, or universal life doesn’t matter.

The insurance policy will pay off the balance if you die while the loan is outstanding.

One of the most common uses for collateral assignments is with SBA loans , especially if you do not have other assets to post as collateral.

The collateral assignment applies to the entire policy, including any life insurance rider benefits that may be included.

The Collateral Assignment Process: A Step-by-Step Guide

The process is similar whether you are adding the assignment to an existing policy or buying new coverage.

There are two parties to a collateral assignment.

Assignor – Is the owner of the life insurance policy
Assignee – Is the lender

Life insurance companies have standardized forms used for this purpose.

The owner completes the form and sends it to the lender for review and signature.
Once completed by the lender, the form is sent to the insurance company.
The insurance company records the assignment and confirms to the owner and lender that it is complete.

This may all seem confusing if you haven’t used an assignment before, but the reality is that most life insurers make it pretty easy to complete.

Releasing a Collateral Assignment

When you pay off your loan, you have the right to have the collateral assignment released.

It’s a simple process :

The policy owner completes the form and sends it to the lender.
The lender signs off on the release. Many companies require a notary as a witness. The lender may return the form to the owner or the insurance company.
Once completed and returned to the insurance company, the release is recorded, and all parties are notified.

Companies typically complete this process in about a week, and it’s a good idea to confirm everything with the home office to avoid potential issues.

Your agent can help with this.

What Happens to a Collateral Assignment if You Die?

How do collateral assignments work when you die?

Your beneficiary will file a death claim with the life insurer at some point.

Collateral Assignment Tip # 1

If your beneficiary is a loved one, it’s a good idea to let them know that your policy has a collateral assignment so they are not surprised when they file the claim.

Here’s an example of how a death claim with a collateral assignment works:

Policy Face Amount = $5,000,000
Beneficiary = Your Spouse
Original Bank Loan = $200,000
Outstanding Loan Balance at Death = $100,000

What happens next?

Your beneficiary will file the death claim with the life insurance company.
The life insurance company will review the claim and see a collateral assignment attached to your policy.
The life insurer contacts the lender for an updated payoff figure.
Payoff amounts are sent directly to the lender.
Your beneficiary receives the balance of the policy death benefit .

For the above example, your lender would receive $100,000, and your beneficiary would receive the remaining $4,900,000.

Collateral Assignment Tip # 2

NEVER name your lender directly as a beneficiary. If you do, the lender will receive the entire death benefit, and your intended beneficiary will have to go through the lender to receive their share.

Collateral Assignments and Health Issues

While lenders may want a life insurance policy as collateral, obtaining life insurance can sometimes be difficult if the insured has substantial health issues .

If you have an existing life insurance policy in effect, you can use that for the assignment.

Another option that exists in some states is contingent coverage.

Contingent coverage is a one-year policy that you can renew.

The policy will exclude death from the known health issue but provide coverage for new health issues that develop or from accidental deaths .

Many lenders accept this coverage when it’s the only option available. And we’ve also seen lenders waive the collateral assignment requirement at times.

What is an Absolute Assignment?

An absolute assignment is a change of ownership of the policy.

When you want to permanently relinquish your rights to the life insurance policy, an absolute assignment is used.

Examples where absolute assignments are used include:

Life Insurance Settlements

1035 exchange, gifting life insurance to charities, irrevocable life insurance trusts (ilit), business insurance planning.

With this transaction, you are selling your life insurance policy to a third party.

If it is a term policy, you would convert a term policy to permanent insurance before it is sold. In some cases, a company will buy the term policy.

Another example may involve admitting seniors to a nursing home, where the nursing home may take over the policy you have.

A 1035 exchange is a tax-free transfer of cash value from universal life or whole life policy to another similar policy.

You can use absolute assignments to transfer your policy to your favorite charity.

You use absolute assignments to transfer your policy to an ILIT permanently.

An example would be a survivorship policy you and your spouse own that you are transferring to the trust.

Many other potential issues may arise with transfers to an ILIT that are beyond the scope of this article.

If you purchase key person life insurance on an employee, absolute assignments transfer ownership to the employee.

Many times, this happens if the employee leaves the company or retires.

You may have a policy permanently assigned to a nursing home or assisted living facility to help with long-term care expenses.

How Do Absolute Assignments Work?

Life insurance companies have forms used for Absolute Assignments.

Absolute assignment forms require:

Current owner name, address, and tax ID information.
New owner name, address, and tax ID information.
Relationship to the proposed insured.
Spousal consent in some states and situations.

The completed forms are submitted to the insurance company, recorded, and confirmations are sent to all parties.

Frequently Asked Questions About Life Insurance Assignments

You may have questions about your life insurance assignment and how it works.

The following are general guidelines, as each situation is uniquely different.

Can the collateral assignment change the beneficiary?

No, the collateral assignment does not change the beneficiary.

The life insurance assignment gives the lender the right to receive proceeds equal to their outstanding loan balance.

Can a business be a beneficiary in a collateral assignment of life insurance?

A business can be the beneficiary of a life insurance policy that is collaterally assigned.

Final Words

Life insurance assignments are common for absolute and collateral assignments.

What is most important is that you understand what is involved with this process.

That’s where we’ll help you make the best decision for your life insurance.

There is never any pressure or obligation with our life insurance service.

Please take a few minutes to submit your quote request today. Thank you.

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Life Insurance Glossary
Absolute Assignment

What is Absolute Assignment in Life Insurance?

<lingo>In life insurance, the term absolute assignment refers to the transfer of all interest, rights, and ownership of an asset â€” in this case, the life insurance policy. This decision is irrevocable, which means it cannot be changed once it is in place. It also applies both to the present and in the future. For those who are purchasing a life insurance policy, it is important to look for a clause like this in the details and to understand what it means to use absolute assignment. In short, all rights and ownership of the policy are being given to another person, specifically listed in the policy.</lingo>

Absolute Assignment Clearly and Briefly Explained

There are numerous reasons why you may wish to pursue an absolute assignment. For example, it may be used in the process of providing collateral for a loan to a lender. In addition to this, some may elect to use this when you wish to donate the proceeds from your life insurance policy to a charity or award them to a specific purpose after your death.

<twitter>In life insurance, the term absolute assignment refers to the transfer of all interest, rights, and ownership of an asset â€” in this case, the life insurance policy. </twitter>

One way to look at absolute assignment is that it allows you to transfer ownership â€” all ownership â€” to another party. When you make this transfer, you remain covered under the life insurance policy. However, the new owner of the policy has the right to make changes to it. For example, they can change the beneficiary of the policy. Most often, this will be done to change the beneficiary of the life insurance policy to the new ownerâ€™s name. In addition, the new owner now has the ability to make all decisions regarding the underlying assets within the investment. The only thing that the new owner cannot do is to eliminate the coverage of the plan.

When absolute assignment occurs, you continue to make payments on it. One common use of this is when you are taking out a loan and the bank is concerned about your age or health. They may require you to take out a life insurance policy and assign absolute assignment. This would help cover the value of the loan should you die while it is in place.

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Absolute Assignment

What does absolute assignment mean.

Absolute assignment refers to a policyholder transferring his or her ownership of a policy to another party. That transfer means that all of the coverage within that policy will now go to the newly named party. The original owner of the policy does not have to state his or her reasons for doing so nor does he or she need to stipulate any conditions for the transfer.

Insuranceopedia Explains Absolute Assignment

There are a number of reasons why a policyholder transfers all of their rights to a policy to another person or entity. They might think of it as a gift to someone else. It could be the sole means of paying off a loan. Even if the insured has now given up their rights to all of the claims and privileges, they are still responsible for payments for the policy. The new owner might have been asked by the original owner to pay the insurer after the transfer is completed, but if the newly named party fails to do so, the negligence will not be blamed on that person but on the original policyholder.

Related Definitions

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What Is Absolute Assignment In Insurance?

Absolute Assignment refers to an assignor’s irrevocable transfer of all present and future property rights, title, interests, and incidents of ownership connected to the assigned group insurance policy to an assignee (s). The individual who assigns the task is known as the assignor.

What does absolute mean in insurance?

“Absolute” Exclusions exclusions contained in certain insurance policy forms that prevent coverage for claims that are only tangentially related to the exclusion’s true nature. The agent’s insurance may not respond to the claim due to the wording of the “absolute” exclusion mentioned above.

What is assigned in an absolute assignment of a life insurance policy?

Absolute assignment refers to the transfer of entire interest, rights, and ownership of an asset in this case, a life insurance policy in life insurance. This decision is irreversible, meaning it cannot be reversed once it has been made. It is also true in the present and the future. It is critical for anyone obtaining a life insurance policy to check for a clause like this in the fine print and to understand what absolute assignment entails. In other words, all rights and ownership of the policy are transferred to a specific person named in the policy.

Absolute Assignment Clearly and Briefly Explained

There are a variety of reasons why you might want to do an absolute assignment. It may, for instance, be used to provide security for a loan to a lender. Additionally, some people may choose to use this if they want to donate the proceeds of their life insurance policy to a charity or give them to a specific cause after they die.

Absolute assignment refers to the transfer of entire interest, rights, and ownership of an asset in this case, a life insurance policy in life insurance.

Absolute assignment, in one sense, permits you to transfer ownership whole ownership to another person. When you make this transfer, your life insurance policy continues to cover you. The policy’s new owner, on the other hand, has the right to make modifications to it. They can, for example, change the policy’s beneficiary. Most of the time, this is done to convert the life insurance policy’s beneficiary to the new owner’s name. In addition, the new owner now has complete control over the investment’s underlying assets. The only thing the new owner is unable to do is terminate the plan’s coverage.

You continue to make payments on it even if absolute assignment occurs. When you’re applying for a loan and the bank is concerned about your age or health, this is a regular scenario. They may demand that you get life insurance and assign absolute assignment. This would assist cover the loan’s value if you died while it was in effect.

What is conditional assignment and absolute assignment?

1. Unconditional Assignment. 2. Assignment with conditions. The term “conditional assignment” refers to a transfer of rights from the assignor to the assignee that is subject to specific terms and conditions.

Can absolute assignment be revoked?

What should you do with an insurance assignment, why should you do it, and how should you do it? Learn the difference between a conditional and an absolute assignment. What is the impact of insurance assignment on Muslims? How can you make a corporate assignment?

What is an Insurance Assignment?

The assignment of ownership from the Policy Owner (Assignor) to someone else (or institution aka Assignee). As if the Assignee were the Policy Owner, the Assignee has control over the insurance policy.

The life assured under the insurance has not changed, and the policy has not changed.

Absolute Assignment: The Assignee receives complete ownership and rights to the policy.
Conditional Assignment: The Assignee receives rights and ownership of the policy if specific conditions are met.

Absolute Assignment

Revocation: It is not possible to revoke a license. However, a willing Assignee can cancel or reassign the assignment.
Muslim-specific: Anyone (Muslim or non-Muslim) can be named as a beneficiary on a Muslim insurance.

Why an Insurance Assignment?

In the event that a Muslim wishes to ensure that a life insurance claim is paid to a non-Muslim (and vice versa).
Settlement, which entails handing over the policy to trustees in order to give effect to any subsequent or contingent interests.
Transfer to current settlement trustees or beneficiaries in accordance with the trusts.
As a keyman business insurance policy, it ensures that the company or individual receives the funds needed to continue operations after the death of the life assured.

How do you perform an Assignment?

The following are some general guidelines for an insurance assignment. To be sure, check with your insurance company or agent.

At the customer service desk, both parties (assignor and assignee) must be present (w.e.f. March 1, 2017)
Prior to signing papers, staff will go over the assignment (absolute/conditional) and policy benefits in detail.
For assignment contract stamping purposes, the client must prepare a RM10 hasil stamp (bought separately from the post office) and pay a minor (RM2) processing fee.

Assignment to a Company

Return including information from the register of directors, managers, and secretaries, as well as modifications in information.
For the appointed Authorized Person, a letter from the Company or a resolution from the Board of Directors is required.

The main distinction is that an assignee is the (full/conditional) owner of a life insurance policy, but a nominee will only get benefits if there is a claim (i.e. death claim).

What are the consequences of an absolute assignment?

Because the policyowner, not the insurer, owns the policy, the owner has the same rights to give it away as any other piece of property he or she owns; the insurer’s consent is not necessary. Assignment is the term for the transfer of ownership, and the assignee is the new owner.

When a policy is transferred under an absolute assignment, the transfer is permanent and the assignee has complete control over the policy. The assignee can even modify the beneficiary without the beneficiary’s approval if the beneficiary was not specified as irrevocable.

A collateral assignment occurs when a policy is transferred as a method of establishing security on a debt. If the insured dies before the obligation is paid off, the creditor receives the balance of the debt from the policy proceeds. If there are any money left over after the debt is paid, the remainder goes to the policy’s beneficiary.

A $10,000 policy has been assigned to cover a $5,000 mortgage by the policyowner. When the insured dies, how will the firm pay the claim?

If an absolute assignment is made, the company will pay the assignee the entire proceeds. The corporation will normally make the check payable jointly to the assignee and the beneficiary if a collateral assignment was made. If a partial assignment was done, the assignee will receive the unpaid mortgage balance, while the remaining will go to the policy beneficiary.

How many types of insurance assignments are there?

Assignments of various types There are two types of assignments: (1) those that are assigned to you and (2) those that are assigned to Assignment that is conditional: When the insured chooses to convey the policy’s benefits to a relative in the event of an early death or specified conditions, this is done. Once the prerequisites are met, the policyholder’s rights are restored.

What is the difference between nomination and assignment?

The policyholder has the opportunity to nominate a person to receive benefits in the event of the life assured’s untimely death during the policy term. A Nominee is the individual who will receive the benefit. Section 39 of the Insurance Act allows for nomination.

What is difference between assign and transfer?

The distinction between assignment and transfer is that assign implies that it is legal to transfer property or a legal right from one person to another, but transfer implies that it is permissible to arrange for something to be controlled by or formally belong to another person.

As verbs, assign and transfer mean to set aside or designate something for a specific purpose, whereas transfer implies to pass or move from one person, location, or item to another. When used as nouns, assign refers to the assignee, while transfer refers to the act of moving something from one person, item, or location to another. Assignment is used with obligations and rights, whereas transfer is used with titles.

LESSON 3: LIFE INSURANCE POLICIES, PROVISIONS, OPTIONS AND RIDERS

3.9.9 assignment provision - absolute and collateral.

Since the policyowner actually owns the policy, not the insurer, the owner has every right to give the policy away just like any other owned piece of property; the insurer's permission is not required. 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. As long as the beneficiary was not designated as an irrevocable, the assignee can even change the beneficiary without the beneficiary's permission.

If the policy is transferred as a means of establishing security on a debt, it is considered a collateral assignment . If the insured dies before the debt is repaid, the balance of the debt is paid to the creditor out of the policy proceeds. If there are any funds left once the debt has been satisfied, the rest of the proceeds go to the policy's beneficiary.

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?

If 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. 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.

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Home » Articles Library » 2 Ways to Transfer Ownership of a Life Insurance Policy

2 Ways to Transfer Ownership of a Life Insurance Policy

Things to Know about Borrowing Against Your Life Insurance Policy

As property, policyowners can transfer their life insurance contracts to other persons or entities. A policyowner can transfer either all or only some of the “bundle of rights” that comprises a life insurance policy to almost any person or entity.

The two basic ways of making a lifetime transfer of a policy are: (1) the absolute assignment; and (2) the collateral assignment. An absolute assignment, as its name implies, transfers all the policyowner’s rights irrevocably. A collateral assignment, again as its name implies, assigns so much of the death benefit as necessary for as long as necessary to secure a lender’s rights. But no more of the proceeds will go to the lender than the amount of debt owed.

Requirements

The assignment does not have to be of any particular form (absent specific provisions in state law or the contract to the contrary). Because life insurance is treated as personal property, policyowner may transfer ownership rights, not only by many different types of documents, but also by many different actions. For example, if a person sells a business and the business owns a life insurance policy, the sale of all the assets of the business carries with it the personal property the business owned – including the life insurance.

Likewise, a property settlement in connection with a divorce may have the effect of transferring the ownership of life insurance on the life of one or the other (or both) spouse(s) even though no one ever uses the word “assignment” with regard to these transfers. But this type of transfer (where a clause in the divorce decree disposes of life insurance) is both very dangerous and very awkward. If a policyowner names his new spouse as beneficiary of the insurance proceeds and the insurer has no notice or knowledge of the divorce decree’s change, both spouses are likely to claim the proceeds. Furthermore, if the decree requires the policyowner spouse to maintain the policy for the benefit of his or her ex-spouse, the policyowner cannot obtain a policy loan-even to keep the policy in force through a premium loan.

Before either the absolute or collateral type of assignment or any other instance of a policy ownership transfer is valid, the policyowner must notify the insurer (and, where required by the terms of the contract, the insurer must consent to the assignment). Once notified in writing at the insurer’s home office, the insurer must honor the policyowner’s transfer—unless the terms of the contract itself forbid assignments. So if the insurer then disregards (by intention or neglect) the assignee’s rights and makes payment to someone else, the courts may force the insurer to make a second payment to the assignee. If the policyowner gives no notice to the insurer, it will be protected in a transaction initiated by a former owner. For instance, if the former owner applies for a policy loan and he has not given the insurer proper notice that he had assigned the policy, the insurer is protected in making that loan.

The insurer does not, however, have to verify the bona fides of the transaction between the policyowner and the transferee nor the validity of the transaction. In other words, the insurer is not accountable for the mental or legal capacity of the policyowner to make the assignment (unless it had knowledge that the policyowner was not legally competent to make it or there were irregularities in the assignment form).

Absolute Assignments

Policyowners use an absolute assignment in life insurance planning when the policyowner wants to sell or give away all of his or her rights under the contract. The goal might be to obtain valuable consideration, to save estate taxes, avoid creditors, or purely for love and affection and to assure the transferee of financial security. There are many common examples of sales and gifts:

A client might sell a policy on his life to his business.
A business might sell a policy on an employee’s life to the employee or to the employee’s spouse or child or trust (or to a pension plan).
A shareholder might sell a policy on his life to a new business associate.
A client might give a policy on her life to her spouse.
A client might give a policy on his life to his children or to a family trust.

Tax Implications

Both sales and gift transactions have important and sometimes unexpectedly expensive tax implications. Planners should thoroughly research before allowing any sale of a life insurance policy. Also, understand what should be considered before allowing a client to make a gift of a policy. A valid gift requires that the donor have contractual capacity and intent to make a voluntary gratuitous transfer and the gift must be delivered to and accepted by the donee (assignee).

Nontax Implications

Planners must be aware of the nontax implications of an absolute assignment in order to avoid them and/or alert the client to their potential effect. Some of these are:

Although an absolute assignment itself may not per se change the interest of a revocable beneficiary, as a practical matter the new owner can immediately change the beneficiary and often makes that change almost simultaneously with the assignment. Some absolute assignment forms state that the new owner is automatically the primary policy beneficiary until the new owner makes a change to the beneficiary designation.

If the policyowner made an irrevocable beneficiary designation before making an absolute assignment of the policy, in most states the assignment will not defeat that designation (without the written consent of the beneficiary) and the transferee should be apprised of this fact.

Absolute assignments may put the policy and its proceeds beyond the claims of the policyowner’s creditors, but planners should inform policyowner that—like diamonds—an absolute assignment is forever. There is a loss of both control and flexibility from the transferor’s viewpoint.

WHAT IS ABSOLUTE ASSIGNMENT?

Absolute Assignment is a legal instrument that allows the owner of a life insurance policy or other valuable assets to transfer all rights and ownership of the asset to a designated assignee. This transfer of ownership is comprehensive and unrestricted, giving the assignee complete control and authority over the asset. Unlike conditional assignment, which may have specific conditions attached, absolute assignment represents an unqualified transfer of ownership..

Absolute assignment can be used not only in the context of life insurance but also for transferring ownership of other valuable assets such as real estate and securities. It involves a meticulous adherence to legal requirements and procedural details to ensure the validity and legality of the ownership transfer. Seeking guidance from legal and financial experts is essential to ensure a smooth and legally sound execution of the absolute assignment process..

When considering selling a life insurance policy, individuals have the option to engage in a life settlement, wherein the policy is sold to institutional buyers in the secondary market. This process involves applying to various licensed buyers who compete to offer the highest bid for the policy. An experienced life settlement broker can facilitate this auction-style bid process, ensuring that policy owners receive the best possible offer for their policies..

Welcome Funds is a nationally licensed life settlement broker that specializes in representing policy owners in the secondary market for life insurance. They engage in an auction bidding process to secure the highest offer from institutional buyers, providing professional representation and expert counsel throughout the sale of the life insurance policy..

To explore the eligibility of a life insurance policy for a potential life settlement, individuals can embark on a cost-free and commitment-free journey by engaging in a Life Settlement Qualification Process. This process includes a complimentary Personal Consultation & Appraisal, during which confidentiality is safeguarded. Interested individuals can complete a Quick Life Settlement Qualifier online or call a toll-free number to connect with a dedicated Client Care Advocate..

Overall, the combination of absolute assignment and the life settlement process provides individuals with a means to transfer ownership of valuable assets and explore options for selling their life insurance policies in a competitive market..

Complete our quick Life Settlement Qualifier or call us toll-free at 877.227.4484 to speak with a Client Care Advocate.

LIFE SETTLEMENT BLOG

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Direct Life Settlement Buyers vs. Welcome Funds – Advisor Beware!

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Welcome Funds has the privilege of working with numerous financial advisors and wealth managers – and have done so for two decades – some who exclusively focus on servicing high net worth clients. One such advisor who is active in the life settlement market — and already understands the value he can create for his clients — had historically negotiated directly himself with two or three leading buyers of life insurance policies. He thought that simply engaging with mor...

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How to Sell Your Life Insurance Policy for $4,743,000 Instead of $275,485?

Mr. Williams purchased $10 Million in life insurance coverage in 2001 to provide his family with financial security. Over time, his financial priorities changed: his wife passed away, his children became financially independent, financial burdens arose and the estate tax exemption increased substantially.

what is the cash value of a life insurance policy

Suitability of Life Settlements

Traditionally, estate planning advisors counsel their high net worth clients to obtain life insurance policies with large death benefits. The strategy is simple: create a vehicle for heirs to receive tax-free income at the time of an insured’s passing so sufficient funds are available to pay large estate tax bills when assets are inherited.

What is the Most Suitable Exit Strategy for Life Insurance?

All eyes in the life insurance agency and the financial advisory world have been on New York, where in the summer of 2019, the New York State Supreme Court paved the way for implementation of Insurance Regulation 187. This rule imposes a new standard for agents and brokers when issuing a recommendation to a client regarding an annuity or life insurance product.

How to Get the Highest Life Settlement Offer

When you decide to sell a valuable personal asset, you usually want to obtain the highest purchase price for that property. It is sound business sense. However, how do you truly know when you have reached the point of accepting and securing the most desirable offer?

Understanding the Fair Market Value of a Life Insurance Policy

When a professional advisor identifies a life insurance policy that a client no longer needs or wishes to maintain, he should ask, as standard protocol, whether that policy may have value in the secondary market. If so, the client may be able to sell the policy in a life settlement transaction, enabling him to receive a higher cash payout than he otherwise would obtain by lapsing or surrendering the policy back to the insurance company.

The Power of a Life Settlement Auction

Professional advisors with clients who no longer need or wish to maintain a life insurance policy have options when exploring the secondary market. Many advisors prudently rely on a licensed life settlement broker to assist them in the sale of the policy and with all aspects of the transaction. However, there is still a large number of professionals persuaded to work directly with only one buyer, called a life settlement provider.

Life settlement brokers represent the policy owner in the sale of their life insurance policy

Rebuttals to the “Direct Buyer” Model for Life Settlements

Most professional advisors who explore the potential sale of an unwanted life insurance policy on behalf of their clients will rely on the assistance of a licensed life settlement broker. Life settlement brokers represent the policy owner in the transaction and have a duty to act in their best interests. Most notably, the broker’s and client’s goal is aligned: to sell the policy for the highest price possible.

Carrier Resistance To Life Settlements: Clients Need To Know They Can Sell Their Policies

Consumers who sell their life insurance policies in the life settlement market receive as much as seven times more money than they would have received by surrendering their policies back to the insurance companies. Seven times! However, an estimated 9 out of 10 policies are allowed to lapse before paying a claim, according to the Life Insurance...

The Danger of Trying to “Time the Market” for Life Settlements

Most investors in the stock market understand the danger of “market timing” — trying to choose the right day to buy a stock when the price is low and sell it when the price is high.

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What is Assignment and Nomination in Life Insurance?

‘Assignment’ and ‘Nomination’ are two most common terms used in a life insurance policy document. Let us understand the importance of these two terms in-detail.

By Future Generali. Updated On Oct 06, 2022

What is Assignment and Nomination in Life Insurance?

Your life insurance policy is a contract between you (insured) and the insurance company (insurer). The contract is filled with jargon. To the extent possible, we must understand all the terms mentioned in the policy bond (certificate). ‘Assignment’ and ‘Nomination’ are two most common terms used in the insurance world.

For instance, in the event that you plan to apply for a home loan, your home loan provider will surely use these terms. Hence, it is best to be sure and understand exactly what the terms mean before you make a decision to buy the policy.

What is assignment in life insurance?

A life insurance policy can be assigned when rights of one person are transferred to another. The rights to your insurance policy can be transferred to someone else for various reasons. The process is known as assignment.

An “assignor” (policyholder) is the person who assigns the insurance policy. An “assignee” is the person to whom the policy rights have been transferred, i.e. the person to whom the policy has been assigned.

In the event rights are transferred from an Assignor to an Assignee, the rights of the policyholder are canceled, and the Assignee becomes the owner of the insurance policy.

People often assign their life insurance policies to banks. A bank becomes the policy owner in this case, while the original policyholder continues to be the life assured whose death may be claimed by either the bank or the policy owner.

Types of Assignment

There are two ways to assign an insurance policy. They are as follows:

1. Absolute Assignment

During this process, the rights of the assignor (policyholder) will be completely transferred to the assignee (person to whom the policy rights have been transferred). It is not subject to any conditions.

As an example, Mr. Rajiv Tripathi owns a Rs 1 Crore life insurance policy. Mr. Tripathi wants to gift his wife this policy. Specifically, he wants to make “absolute assignment” of the policy in his wife's name, so that the death benefit (or maturity proceeds) can be paid directly to her. After the absolute assignment has been made, Mrs. Tripathi will own this policy, and she will be able to transfer it to someone else again.

2. Conditional Assignment

As part of this type of assignment, certain conditions must be met before the transfer of rights occurs from the Assignor to the Assignee. The Policy will only be transferred to the Assignee if all conditions are met.

For instance, a term insurance policy of Rs 50 Lakh is owned by Mr. Dinesh Pujari. Mr. Pujari is applying for a home loan of Rs 50 Lakh. For the loan, the banker asked him to assign the term policy in their name. To acquire a home loan, Mr. Pujari can assign the insurance policy to the home loan company. In the event of Mr. Pujari’s death (during the loan tenure), the bank can collect the death benefit and get their money back from the insurance company.

Mr. Pujari can get back his term insurance policy if he repays the entire amount of his home loan. As soon as the loan is repaid, the policy will be transferred to Mr. Pujari.

In the event that the insurer receives a death benefit that exceeds the outstanding loan balance, the bank will be paid from the difference between the death benefit and the loan and the balance will be paid directly to the nominee. In the above example, the remaining amount (if any) will be paid to Mr. Pujari’s beneficiaries (legal heirs/nominee).

Key Points to know Note About Assignment

In regards to the assignment, the following points should be noted:

A policy assignment transfers/changes only the ownership, not the risk associated with it. The person assured thus becomes the insured.
The assignment may lead to cancellation of the nomination in the policy only when it is done in favour of the insurance company due to a policy loan.
Assignment for all insurance plans except for the pension plan and the Married Women's Property Act (MWP), can be done.
A policy contract endorsement is required to effect the assignment.

What is nomination in life insurance?

Upon the death of the life assured, the nominee/ beneficiary (generally a close relative) receives the benefits. Policyholders appoint nominees to receive benefits. Under the Insurance Act, 1938, Section 39 governs the nomination process.

Types of Nominees

In a life insurance policy, the policyholder names someone who will receive the benefits in the event of the life assured's death. Here are a few types of nominees:

1. Beneficial Nominees

In accordance with the law, the beneficiary of the claimed benefits will be any immediate family member nominated by the policyholder (like a spouse, children, or parents). Beneficiary nominees are limited to immediate family members of the beneficiary.

2. Minor Nominees

It is common for individuals to name their children as beneficiaries of their life insurance policies. Minor nominees (under the age of 18) are not allowed to handle claim amounts. Hence, the policyholder needs to designate a custodian or appointee. Payments are made to the appointee until the minor reaches the age of 18.

3. Non-family Nominees

Nominees can include distant relatives or even friends as beneficiaries of a life insurance policy.

4. Changing Nominees

It is okay for policyholders to change their nominees as often as they wish, but the latest nominee should take priority over all previous ones.

Key Points to Note About Nomination

In regards to the nomination, the following points should be noted:

In order to nominate, the policyholder and life assured must be the same.
In the case of a different policyholder and life assured, the claim benefits will be paid to the policyholder.
Nominations cannot be changed or modified.
The policy can have more than one nominee.
As part of successive nominations, if the life assured appoints person “A” as the first person to receive benefits. Now, in the event of the life assured’s death after person “A” dies, the claim benefits will be given to person “B”. The benefits will be available to Nominee “C” if Nominee “A” and Nominee “B” have passed away.

What is the difference between nomination and assignment?

Let's talk about the differences between assignment and nomination.

Nomination and Assignment serve different purposes. The nomination protects the interests of the insured as well as an insurer in offering claim benefits under the life insurance policy. On the other hand, assignment protects the interests of an assignee in availing the monetary benefits under the policy. The policyholder should be aware of both of them before buying life insurance.

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Secured loans are often used by individuals needing financial resources for any reason, whether it’s to fund a business, remodel a home or pay medical bills. One asset that may be used for a secured loan is life insurance. Although there are pros and cons to this type of financial transaction, it can be an excellent way to access needed funding. Bankrate’s insurance editorial team discusses what a collateral assignment of life insurance is and when it might—or might not—be the best loan option for you.

What is collateral assignment of life insurance?

A collateral assignment of life insurance is a method of securing a loan by using a life insurance policy as collateral . If you pass away before the loan is repaid, the lender can collect the outstanding loan balance from the death benefit of your life insurance policy . Any remaining funds from the death benefit would then be disbursed to the policy’s designated beneficiary(ies).

Why use life insurance as collateral?

Collateral assignment of life insurance may be a useful option if you want to access funds without placing any of your assets, such as a car or house, at risk. If you already have a life insurance policy, it can be a simple process to assign it as collateral. You may even be able to use your policy as collateral for more than one loan, which is called cross-collateralization, if there is enough value in the policy.

Collateral assignment may also be a credible choice if your credit rating is not high, which can make it difficult to find attractive loan terms. Since your lender can rely on your policy’s death benefit to pay off the loan if necessary, they are more likely to give you favorable terms despite a low credit score.

Pros and cons of using life insurance as collateral

If you are considering collateral assignment, here are some pros and cons of this type of financial arrangement.

It may be an affordable option, especially if your life insurance premiums are less than your payments would be for an unsecured loan with a higher interest rate.
You will not need to place personal property, such as your home, as collateral, which you would need to do if you take out a secured loan. Instead, if you pass away before the loan is repaid, lenders will be paid from the policy’s death benefit. Any remaining payout goes to your named beneficiaries.
You may find lenders who are eager to work with you since life insurance is generally considered a good choice for collateral.
The amount that your beneficiaries would have received will be reduced if you pass away before the loan is paid off since the lender has first rights to death benefits.
You may not be able to successfully purchase life insurance if you are older or in poor health.
If you are using a permanent form of life insurance as collateral, there may be an impact on your ability to use the policy's cash value during the life of the loan. If the loan balance and interest payments exceed the cash value, it can erode the policy's value over time.

What types of life insurance can I use as collateral for a loan?

You may use either of the main types of life insurance— term and permanent —for collateral assignment. If you are using term life insurance, you will need a policy with a term length that is at least as long as the term of the loan. In other words, if you have 20 years to pay off the loan, the term insurance you need must have a term of at least 20 years.

Subcategories of permanent life insurance, such as whole life , universal life and variable life, may also be used. Depending on lender requirements, you may be able to use an existing policy or could purchase a new one for the loan. A permanent policy with cash value may be especially appealing to a lender, considering the added benefit of the cash reserves they could access if necessary.

How do I take out a loan using a collateral assignment of life insurance?

If you already have enough life insurance to use for collateral assignment, your next step is to find a lender who is willing to work with you. If you don’t yet have life insurance, or you don’t have enough, consider the amount of coverage you need and apply for a policy . You may need to undergo a medical exam and fill out an application .

Once your policy has been approved, ask your insurance company or agent for a collateral assignment form, which you will complete and submit with your loan application papers. The form names your lender as an assignee of the policy—meaning that they have a stake in its benefits for as long as the loan exists. You will also name beneficiaries or a single beneficiary, who will receive whatever is left over from the death benefits after the loan is repaid.

Note that you will need to stay current on your life insurance premium payments while the collateral assignment is active. This will be stated in the loan agreement, and failure to do so could have serious repercussions.

Alternatives to life insurance as collateral

If you are considering a collateral assignment of life insurance, there are a few alternative funding options that might be worth exploring. Since many factors determine each option, working with a financial advisor may be the best way to find the ideal solution for your situation.

Unsecured loan

Depending on your situation, an unsecured loan may be more affordable than a secured loan with life insurance as collateral. This is more likely to be the case if you have good enough credit to qualify for a low-interest rate without having to offer any type of collateral. There are many different types of unsecured loans, including credit cards and personal loans.

Secured loan

In addition to life insurance, there are other items you can use as collateral for a secured loan . Your home, a car or a boat, for example, could be used if you have enough equity in them. Typically, secured loans are easier to qualify for than unsecured, since they are not as risky for the lender, and you are likely to find a lower interest rate than you would with an unsecured loan. The flip side, of course, is that if you default on the loan, the lender can take the asset that you used to secure it and sell it to recoup their losses.

Life insurance loan

Some permanent life insurance policies accumulate cash value over time that you can use in different ways. If you have such a policy, you may be able to partially withdraw the cash value or take a loan against your cash value. However, there are implications to using the cash value in your life insurance policy, so be sure to discuss this solution with a life insurance agent or your financial advisor before making a decision.

Home equity line of credit (HELOC)

A home equity line of credit (HELOC) is a more flexible way to access funds than a standard secured loan. While HELOCs carry the downside of risking your home as collateral, you retain more control over the amount you borrow. Instead of receiving one lump sum, you will have access to a line of credit that you can withdraw from as needed. You will only have to pay interest on the actual amount borrowed.

Frequently asked questions

What is the best life insurance company, what type of loans are collateral assignments usually associated with, what are other common forms of collateral, what are the two types of life insurance assignments.

What is collateral for a mortgage, and how does it work?

What is collateral insurance and how does it work?

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What Is a Collateral Assignment of Life Insurance?

Charlene Rhinehart is a CPA , CFE, chair of an Illinois CPA Society committee, and has a degree in accounting and finance from DePaul University.

A collateral assignment of life insurance is a conditional assignment appointing a lender as an assignee of a policy. Essentially, the lender has a claim to some or all of the death benefit until the loan is repaid. The death benefit is used as collateral for a loan.

The advantage to using a collateral assignee over naming the lender as a beneficiary is that you can specify that the lender is only entitled to a certain amount, namely the amount of the outstanding loan. That would allow your beneficiaries still be entitled to any remaining death benefit.

Lenders commonly require that life insurance serve as collateral for a business loan to guarantee repayment if the borrower dies or defaults. They may even require you to get a life insurance policy to be approved for a business loan.

Key Takeaways

The borrower of a business loan using life insurance as collateral must be the policy owner, who may or may not be the insured.
The collateral assignment helps you avoid naming a lender as a beneficiary.
The collateral assignment may be against all or part of the policy's value.
If any amount of the death benefit remains after the lender is paid, it is distributed to beneficiaries.
Once the loan is fully repaid, the life insurance policy is no longer used as collateral.

How a Collateral Assignment of Life Insurance Works

Collateral assignments make sure the lender gets paid only what they are due. The borrower must be the owner of the policy, but they do not have to be the insured person. And the policy must remain current for the life of the loan, with the policy owner continuing to pay all premiums . You can use either term or whole life insurance policy as collateral, but the death benefit must meet the lender's terms.

A permanent life insurance policy with a cash value allows the lender access to the cash value to use as loan payment if the borrower defaults. Many lenders don't accept term life insurance policies as collateral because they do not accumulate cash value.

Alternately, the policy owner's access to the cash value is restricted to protect the collateral. If the loan is repaid before the borrower's death, the assignment is removed, and the lender is no longer the beneficiary of the death benefit.

Insurance companies must be notified of the collateral assignment of a policy. However, other than their obligation to meet the terms of the contract, they are not involved in the agreement.

Example of Collateral Assignment of Life Insurance

For example, say you have a business plan for a floral shop and need a $50,000 loan to get started. When you apply for the loan, the bank says you must have collateral in the form of a life insurance policy to back it up. You have a whole life insurance policy with a cash value of $65,000 and a death benefit of $300,000, which the bank accepts as collateral.

So, you then designate the bank as the policy's assignee until you repay the $50,000 loan. That way, the bank can ensure it will be repaid the funds it lent you, even if you died. In this case, because the cash value and death benefit is more than what you owe the lender, your beneficiaries would still inherit money.

Alternatives to Collateral Assignment of Life Insurance

Using a collateral assignment to secure a business loan can help you access the funds you need to start or grow your business. However, you would be at risk of losing your life insurance policy if you defaulted on the loan, meaning your beneficiaries may not receive the money you'd planned for them to inherit.

Consult with a financial advisor to discuss whether a collateral assignment or one of these alternatives may be most appropriate for your financial situation.

Life insurance loan (policy loan) : If you already have a life insurance policy with a cash value, you can likely borrow against it. Policy loans are not taxed and have less stringent requirements such as no credit or income checks. However, this option would not work if you do not already have a permanent life insurance policy because the cash value component takes time to build.

Surrendering your policy : You can also surrender your policy to access any cash value you've built up. However, your beneficiaries would no longer receive a death benefit.

Other loan types : Finally, you can apply for other loans, such as a personal loan, that do not require life insurance as collateral. You could use loans that rely on other types of collateral, such as a home equity loan that uses your home equity.

What Are the Benefits of Collateral Assignment of Life Insurance?

A collateral assignment of a life insurance policy may be required if you need a business loan. Lenders typically require life insurance as collateral for business loans because they guarantee repayment if the borrower dies. A policy with cash value can guarantee repayment if the borrower defaults.

What Kind of Life Insurance Can Be Used for Collateral?

You can typically use any type of life insurance policy as collateral for a business loan, depending on the lender's requirements. A permanent life insurance policy with a cash value allows the lender a source of funds to use if the borrower defaults. Some lenders may not accept term life insurance policies, which have no cash value. The lender will typically require the death benefit be a certain amount, depending on your loan size.

Is Collateral Assignment of Life Insurance Irrevocable?

A collateral assignment of life insurance is irrevocable. So, the policyholder may not use the cash value of a life insurance policy dedicated toward collateral for a loan until that loan has been repaid.

What is the Difference Between an Assignment and a Collateral Assignment?

With an absolute assignment , the entire ownership of the policy would be transferred to the assignee, or the lender. Then, the lender would be entitled to the full death benefit. With a collateral assignment, the lender is only entitled to the balance of the outstanding loan.

The Bottom Line

If you are applying for life insurance to secure your own business loan, remember you do not need to make the lender the beneficiary. Instead you can use a collateral assignment. Consult a financial advisor or insurance broker who can walk you through the process and explain its pros and cons as they apply to your situation.

Progressive. " Collateral Assignment of Life Insurance ."

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Kansas Legislative Research Department. " Collateral Assignment of Life Insurance Proceeds ."

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In the life insurance industry, assignment refers to the transfer of ownership of a life insurance policy from the policyholder to another party, such as a creditor, a family member, or a business partner. The process of assignment allows policyholders to assign their rights and benefits under the policy to a third party, typically in exchange for some form of consideration.

Types of Assignment

There are two main types of assignment in the life insurance industry: absolute assignment and collateral assignment.

Absolute assignment is the complete transfer of ownership of a life insurance policy to another party. The assignee becomes the new owner of the policy and assumes all the rights and obligations associated with the policy. Absolute assignment is typically used in cases where the policyholder wants to permanently transfer ownership of the policy, such as when gifting the policy to a family member or selling the policy to a third party.

Collateral assignment, on the other hand, is a partial transfer of ownership of a life insurance policy. In a collateral assignment, the policyholder assigns a portion of the policy’s benefits to a third party, such as a creditor, as collateral for a loan or debt. The assignee does not become the owner of the policy, but rather has a right to the policy’s benefits only to the extent necessary to satisfy the debt.

Process of Assignment

To assign a life insurance policy, the policyholder must first obtain the necessary forms from the insurance company. The forms typically require the policyholder to provide the name of the assignee, the type of assignment (absolute or collateral), and the percentage of the policy’s benefits to be assigned.

Once the forms are completed and signed by both the policyholder and the assignee, they must be submitted to the insurance company for processing. The insurance company will then update its records to reflect the new ownership of the policy, and the assignee will receive a copy of the assignment agreement.

Assignment is an important tool in the life insurance industry that allows policyholders to transfer ownership of their policies to other parties. Whether it is an absolute assignment or a collateral assignment, the process of assignment involves a legal transfer of rights and benefits from the policyholder to the assignee. It is important for policyholders to understand the implications of assigning their policies, and to consult with a qualified insurance professional before making any decisions.

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What Is 'Absolute Assignment'

An absolute assignment is a legal term that describes the transfer of ownership of a life insurance policy from one party to another. In this process, the original policyholder or owner gives up all rights and control over the policy to a third party, typically in exchange for something of value, such as money or a loan.

When a policyholder assigns their life insurance policy, they are essentially transferring ownership of the policy to someone else, who then becomes the new owner of the policy. The new owner of the policy assumes all the rights and responsibilities of ownership, such as paying premiums, maintaining the policy, and receiving the death benefit if the insured person passes away.

The process of absolute assignment requires the original policyholder to sign an absolute assignment form, a legal document that transfers ownership of the policy to the new owner. This document must be signed by both the policyholder and the new owner and submitted to the insurance company for processing.

The absolute assignment of a life insurance policy is often used as collateral for a loan or a way to secure a debt. For example, a person may assign their life insurance policy to a bank or lender as collateral for a loan. If the borrower cannot repay the loan, the bank or lender can collect the death benefit from the policy to cover the outstanding debt.

In addition, absolute assignment is sometimes used in divorce settlements, where one spouse assigns their life insurance policy to the other as part of the property settlement agreement. This ensures that the other spouse receives the death benefit if the insured person dies.

It is important to note that once an absolute assignment has been made, the original policyholder has no control or rights over the policy. They cannot make changes to the policy, such as increasing or decreasing the coverage amount or changing the beneficiary. These rights now belong to the new owner of the policy.

In summary, an absolute assignment is a legal process of transferring ownership of a life insurance policy from one party to another. It requires the original policyholder to sign a legal document that transfers ownership to the new owner, who assumes all the rights and responsibilities of ownership. Absolute assignment is often used as collateral for loans or as part of a divorce settlement agreement. Once an absolute assignment is made, the original policyholder has no control or rights over the policy.

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absolute assignment

A type of assignment where all rights and benefits related to a property or agreement are fully transferred, resulting in the original owner having no remaining stake or claim
The life insurance policyholder decided to opt for an absolute assignment, effectively transferring all his benefits to his children.
After the absolute assignment of the patent rights, the inventor no longer had any interest in the patent.
By executing an absolute assignment, the tenant transferred all his rights and obligations of the lease to the new renter.
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Conditional Assignment of a Life Insurance Policy

The process of transferring rights of a Life Insurance Policy is called Assignment. There are 2 types of Assignment:

Absolute Assignment
Conditional Assignment

Conditional Assignment means that the Transfer of Rights will happen from the Assignor to the Assignee subject to certain terms and conditions. If the conditions are fulfilled then only the Policy will get transferred from the Assignor to the Assignee. Or the policy will get transferred from the Assignor to the Assignee till certain conditions are fulfilled. Once the conditions are fulfilled, the policy automatically gets transferred back to the original owner, i.e. the Assignor.

Let’s take an example:

Rahul owns a Life Insurance Policy of Rs 5 lakhs. He needs to take a loan for his daughter’s school admission. He thought of doing so by taking a loan from the insurer itself or any bank against his Life Insurance Policy of Rs 5 lakhs that he owned.

However, to take a loan from the insurer itself or any bank, he needed to transfer the rights of the Insurance Policy to that entity. Thus he would have had to perform Conditional Assignment of the policy to that Bank. Then the bank would be able to pay out the loan money to him by taking the Insurance Policy as collateral. Thus, if Rahul failed to repay the loan, then the bank would surrender the policy and recover their money.

Once Rahul’s loan is completely repaid, then the policy would automatically come back to Rahul. In case, Rahul died before completely repaying the loan, then also the bank can surrender the policy to get their money back. This type of Assignment is called Conditional Assignment.

Example in real life of Conditional Assignment happens in case of an Insurance Policy being taken by the employer as a perquisite for the employee and it would be given only if he stays with the company for at least 5 years. Then the policy would be purchased by the employer on the employee’s name, but it would get transferred to him only when he completes 5 years. Once the employee completes 5 years of service, the policy gets transferred to him. This type of assignment or transfer of rights of a Life Insurance Policy is called Conditional Assignment.

Sachin Telawane is a Content Manager and writes on various aspects of the Insurance industry. His enlightening insights on the insurance industry has guided the readers to make informed decisions in the course of purchasing insurance plans.

‘Potential misconduct’ behind Judge Merchan’s several Trump trial assignments, Stefanik says

N ew York Republican Rep. Elise Stefanik sent a letter to New York officials on Tuesday arguing there may have been "misconduct" within the New York Supreme Court system to ensure Judge Juan Merchan presided over the unprecedented NY v. Trump trial .

"One cannot help but suspect that the ‘random selection’ at work in the assignment of Acting Justice Merchan, a Democrat Party donor, to these cases involving prominent Republicans, is in fact not random at all," Stefanik wrote in the letter, which she sent to the New York State Commission on Judicial Conduct and the Office of the Inspector General of the New York State Unified Court System, warning of "potential misconduct." The Daily Mail first reported the letter Tuesday .

Stefanik pointed to how Merchan has overseen a handful of cases involving Trump or his allies , including the NY v. Trump case, the criminal trial against the Trump Organization in 2022 – a case that found the organization guilty of tax fraud – and is set to oversee the upcoming trial of Trump ally Steve Bannon.

"The simple answer to why Acting Justice Merchan has been assigned to these cases would seem to be that whoever made the assignment intentionally selected Acting Justice Merchan to handle them to increase the chance that Donald Trump, the Trump Organization, and Steven Bannon would ultimately be convicted," Stefanik continued in the letter.

STEFANIK FILES ETHICS COMPLAINT AGAINST TRUMP TRIAL JUDGE, CITES DAUGHTER'S WORK FOR GROUP PROMOTING DEMS

Her letter called on the commission and the Inspector General to "investigate this anomaly to determine whether the required random selection process was in fact followed in the assignment of these criminal cases to Acting Justice Merchan."

READ ON THE FOX NEWS APP

She continued that if Merchan or other justices of the court violated assignment rules, she hopes the "Commission would subject them to the required discipline."

The letter comes the same day the defense and prosecution teams held closing arguments in the NY v. Trump trial.

Last week, Stefanik filed an ethics complaint against Merchan for an alleged conflict of interest related to his daughter's role representing Democrat politicians and political action committees. Merchan's daughter is the president of Authentic Campaigns, a digital marketing agency that has included clients such as Rep. Adam Schiff, D-Calif.

Stefanik said in her complaint last week that she learned that the New York State Commission on Judiciary Conduct "privately cautioned [Merchan] in July over his illegal political donations to Biden and Democrats in 2020."

"This private caution has not deterred Judge Merchan’s judicial misconduct, as evidenced by this current complaint," she wrote. "Judge Merchan appears driven by Democrat partisanship and financial gain for his daughter."

TRUMP SAYS JUDGE MERCHAN HAS WAY TO GAIN BACK ‘RESPECT’ DESPITE PRESIDING OVER ‘WITCH HUNT’ TRIAL

Stefanik said it is "imperative that New Yorkers and all Americans have confidence that justice is being dispensed fairly in New York."

Trump has also railed against Merchan as a "conflicted" judge and previously called on him to recuse himself from the case, citing his daughter's work as a political consultant.

COHEN'S BOMBSHELL ADMISSION COULD LEAD TO HUNG JURY, IF NOT ACQUITTAL: EXPERT

"Judge Juan Merchan, who is suffering from an acute case of Trump Derangement Syndrome (whose daughter represents Crooked Joe Biden, Kamala Harris, Adam ‘Shifty’ Schiff, and other Radical Liberals, has just posted a picture of me behind bars, her obvious goal, and makes it completely impossible for me to get a fair trial) has now issued another illegal, un-American, unConstitutional ‘order,’ as he continues to try and take away my Rights," Trump posted on Truth Social ahead of the trial kicking off.

TRUMP RISKS GAG ORDER VIOLATION WITH NEW SCREED AGAINST LAWYER WHO ARGUED CASE: 'UNBELIEVABLE'

Trump has since been placed under a gag order, which bans him from publicly speaking about witnesses or making remarks about court staff, DA staff or family members of staff. Following the gag order, Trump has taken to calling Merchan "conflicted" and "corrupt" but not going into great detail about Merchan's alleged corruption.

"We have a judge who’s highly conflicted. He happens to be corrupt. Yes, there is confliction. It’s the worst that anybody’s seen. Nobody has ever seen anything like it," Trump said Tuesday morning ahead of court.

Last week, Trump said Merchan could gain back "respect" if he dismissed the case.

"This case should be dropped by the judge. I think the judge, if he did, that … could gain the respect back. The appellate court has to step in, something has to happen. Think of it, the Republican Party, one of the two great parties, nominates somebody to be their candidate. And that candidate now has been sitting here for almost five weeks in a freezing cold icebox listening to this stuff," Trump said last Monday.

Fox News Digital reached out to the offices of the New York State Commission on Judicial Conduct and the Office of the Inspector General of the New York State Unified Court System on Tuesday evening but did not immediately receive responses.

Original article source: ‘Potential misconduct’ behind Judge Merchan’s several Trump trial assignments, Stefanik says

Former President Trump and Judge Juan Merchan AP Images

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Rep. stefanik slaps judge juan merchan with misconduct complaint over ‘random’ assignment to trump ‘hush money’ trial.

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Rep. Elise Stefanik (R-NY) filed a misconduct complaint Tuesday against the judge overseeing Donald Trump’s Manhattan hush money trial , alleging that his selection to handle the former president’s case — and others involving his allies — is “not random at all.”

The House Republican Conference chairwoman’s complaint with the inspector general of the New York State Unified Court System called for an investigation into Justice Juan Merchan “to determine whether the required random selection process was in fact followed.”

“The potential misconduct pertains to the repeated assignment of Acting Justice Juan Merchan, a Democrat Party donor, to criminal cases related to President Donald J. Trump and his allies,” Stefanik wrote .

“Acting Justice Merchan currently presides over the criminal case against President Trump brought by Manhattan District Attorney Alvin Bragg,” she said.

“Acting Justice Merchan also presided over the criminal trial against the Trump Organization and will be presiding over the criminal trial of Steve Bannon, a senior advisor in President Trump’s White House and a prominent advocate for President Trump,” Stefanik continued, noting that there were at least two dozen sitting justices eligible to oversee the cases, but Merchan — an acting justice — was selected for all three related to the presumptive 2024 GOP nominee for president and his allies.

“If justices were indeed being randomly assigned in the Criminal Term, the probability of two specific criminal cases being assigned to the same justice is quite low, and the probability of three specific criminal cases being assigned to the same justice is infinitesimally small. And yet, we see Acting Justice Merchan on all three cases,” Stefanik argued.

The congresswoman also highlighted the judge’s political donations, for which he was cleared of misconduct last July by the New York State Commission on Judicial Conduct.

Merchan contributed $15 earmarked for the “Biden for President” campaign on July 26, 2020, and then the following day made $10 contributions to the Progressive Turnout Project and Stop Republicans, Federal Election Commission records show.

The donations were made through ActBlue, the Democratic Party’s preferred online fundraising platform.

The Progressive Turnout Project’s stated mission is to “rally Democrats to vote,” according to the group’s website.

Stop Republicans is a subsidiary of the Progressive Turnout Project and describes itself as “a grassroots-funded effort dedicated to resisting the Republican Party and Donald Trump’s radical right-wing legacy.”

The judge’s daughter, Loren Merchan, is more involved in Democratic politics — through her work as head of the consulting firm Authentic Campaigns — and Stefanik argued in her missive that Loren Merchan’s “firm stands to profit greatly if Donald Trump is convicted.”

“One cannot help but suspect that the ‘random selection’ at work in the assignment of Acting Justice Merchan, a Democrat Party donor, to these cases involving prominent Republicans, is in fact not random at all,” the New York Republican lawmaker wrote.

Stefanik demanded an investigation into the “anomaly” and asked that anyone found to be involved in any sort of “scheme” to get Merchan on the three cases face discipline.

The New York State Office of Court Administration said Merchan’s assignment followed typical procedure.

“As we’ve said repeatedly, including in April 2023, Judge Merchan was assigned to supervise the special grand juries that investigated the Trump Organization and Allen Weisselberg as well as Donald Trump. He was, in turn, assigned the indictments that arose from those investigations, which is common practice since the judge supervising the grand jury investigation already has some familiarity with these often-complex cases and can manage them more efficiently,” OCA spokesperson Al Baker said in a statement.

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Republicans join Trump’s attacks on justice system and campaign of vengeance after guilty verdict

For seven weeks, Donald Trump was on trial in his hometown of New York City as 12 Americans weighed the evidence against him in a hush money case before ultimately voting to convict him, making him the first former president to be convicted of a felony.

A day after a New York jury delivered a historic guilty verdict in Donald Trump’s criminal hush money trial, the presumptive Republican presidential nominee again railed against a “rigged trial” during remarks at Trump Tower.

President Joe Biden says Donald Trump was found guilty in his hush money trial and called it “reckless...dangerous” and “irresponsible” for anyone to claim the process was “rigged.”

U.S. Speaker of the House Mike Johnson, center, and businessman Vivek Ramaswamy listen as former President Donald Trump, left, talks with reporters as he arrives at Manhattan criminal court in New York, on Tuesday, May 14, 2024. (Justin Lane/Pool Photo via AP)

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Rep. Jim Jordan, R-Ohio, chairman of the House Judiciary Committee, speaks during the House Judiciary Committee markup hearing to hold Attorney General Merrick Garland in contempt of Congress, Thursday, May 16, 2024, on Capitol Hill in Washington. (AP Photo/Jose Luis Magana)

Speaker of the House Mike Johnson, R-La., joined at left by Rep. Chip Roy, R-Texas, talk to reporters about their intention to require American citizenship to vote in national elections, as they introduce the Safeguard American Voter Eligibility Act, at the Capitol in Washington, Wednesday, May 8, 2024. (AP Photo/J. Scott Applewhite)

Sen. John Thune, R-S.D., talks after a policy luncheon on Capitol Hill Wednesday, May 8, 2024, in Washington. (AP Photo/Mariam Zuhaib)

U.S. Speaker of the House Mike Johnson speaks at a press conference across the street from the Manhattan criminal court, Tuesday, May 14, 2024, in New York.(AP Photo/Stefan Jeremiah)

Former Maryland Gov. Larry Hogan speaks to supporters during a primary night election party Tuesday, May 14, 2024, in Annapolis, Md., after he won the GOP nomination for the U.S. Senate seat opened by Democratic Sen. Ben Cardin’s retirement. (AP Photo/Daniel Kucin Jr.)

WASHINGTON (AP) — Embracing Donald Trump’s strategy of blaming the U.S. justice system after his historic guilty verdict , Republicans in Congress are fervently enlisting themselves in his campaign of vengeance and political retribution as the GOP runs to reclaim the White House.

Almost no Republican official has stood up to suggest Trump should not be the party’s presidential candidate for the November election — in fact, some have sought to hasten his nomination. Few others dared to defend the legitimacy of the New York state court that heard the hush money case or the 12 jurors who unanimously rendered their verdict.

And those Republicans who expressed doubts about Trump’s innocence or political viability, including his former hawkish national security adviser John Bolton or top-tier Senate candidate Larry Hogan of Maryland, were instantly bullied by the former president’s enforcers and told to “leave the party.”

Rep. Marjorie Taylor Greene, R-Ga., said she’s voting for Trump “whether he is a free man or a prisoner of the Biden regime.”

She also posted the upside-down American flag that has come to symbolize the “Stop the Steal” movement Trump started with allies before the Jan. 6, 2021, attack on the U.S. Capitol.

FILE - Southwest Airlines plane prepares to land at Midway International Airport, Feb. 12, 2023, in Chicago. Southwest Airlines is back in court over firing a flight attendant with anti-abortion views. (AP Photo/Kiichiro Sato, File)

The swift, strident and deepening commitment to Trump despite his felony conviction shows how fully Republican leaders and lawmakers have been infused with his unfounded grievances of a “rigged” system and dangerous conspiracies of “weaponized” government, using them in their own attacks on President Joe Biden and the Democrats.

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Rather than shunning Trump’s escalating authoritarian language or ensuring they will provide checks and balances for a second Trump term, the Republican senators and representatives are upturning longstanding faith in U.S. governance, and setting the stage for what they plan to do if Trump regains power.

On Friday, House Judiciary Committee Chairman Jim Jordan, R-Ohio, demanded the prosecutors Alvin Bragg and Matthew Colangelo appear for a June hearing on the “weaponization of the federal government” and “the unprecedented political prosecution” of Trump — despite the fact that Biden, as president, has no authority over the state courts in New York.

“What we’re gearing up for is if Trump wins, he’s going to use the apparatus of the state to target his political opponents,” said Jason Stanley, a professor at Yale and the author of “How Fascism Works.”

Stanley said history is full of examples of people not believing the rhetoric of authoritarians. “Believe what they say,” he said. “He’s literally telling you he’s going to use the apparatus of the state to target his political opponents.”

At his Trump Tower on Friday in New York, the former president returned to the kinds of attacks he has repeatedly lodged in campaign speeches, portraying Biden as the one who is “corrupt” and the U.S. as a “fascist” nation.

Trump called the members of the bipartisan House committee that investigated the Jan. 6 attack on the U.S. Capitol “thugs” and said Biden was a “Manchurian candidate,” a phrase inspired by the 1960s movie portraying a puppet of a U.S. political enemy.

A Trump campaign memo contained talking points for Republican lawmakers, suggesting they call the case a “sham,” “hoax,” “witch hunt,” “election interference” and “lawfare” designed by Biden, whom it called “crooked.”

Biden faces no such charges, and the House GOP’s efforts to impeach the president over his son Hunter Biden’s business dealings have largely stalled out. Hunter Biden is due in court next week on an unrelated firearms charge in Wilmington, Delaware.

Joe Biden said Friday that “it’s reckless, it’s dangerous, it’s irresponsible, for anyone to say this is rigged just because they don’t like the verdict.”

Asked later at the White House if this could happen to him, Biden said: “Not at all. I didn’t do anything wrong. The system still works.”

As for Trump’s claims the case is being orchestrated by the Democratic president to hurt him politically, Biden quipped: “I didn’t know I was that powerful.”

In the hush money case, Trump was found guilty of trying to influence the 2016 election by falsifying payment to a porn actor to bury her story of an affair. He faces three other felony indictments , including the federal case over his effort to overturn the 2020 election. But they are not likely to be heard before November’s expected election rematch with Biden.

Thursday’s verdict came after a jury in 2023 found Trump to be liable for sexual abuse against advice columnist E. Jean Carroll and a judge in a 2024 business fraud case determined that Trump lied about his wealth for years, ordering him to pay a staggering $355 million in penalties.

Almost to a person, the Republicans in Congress who spoke out provided a singular voice for Trump.

Speaker Mike Johnson on “Fox & Friends” amplified the claim, without evidence, that Democrats are trying to hurt Trump. Johnson, R-La., said he thinks the Supreme Court should “step in” to resolve the case.

“The justices on the court, I know many of them personally, I think they’re deeply concerned about that as we are,” Johnson said.

The outgoing Senate Republican leader, Mitch McConnell of Kentucky, said he expected Trump would win the hush money case on appeal, but the three senators seeking to replace McConnell as leader echoed Trump with stronger criticisms of the judicial system.

South Dakota Sen. John Thune said the case was “politically motivated.” Texas Sen. John Cornyn called the verdict “a disgrace.” Sen. Rick Scott of Florida said that everyone who calls themselves a party leader “must stand up and condemn” what he called “lawless election interference.”

Sen. Susan Collins, the Maine Republican who is known as a bipartisan leader, said the prosecutor “brought these charges precisely because of who the defendant was rather than because of any specified criminal conduct.”

With sentencing in the hush money case expected in July before the Republican National Convention, Republican Rep. Chip Roy of Texas said the GOP should move up the convention to speed up Trump’s nomination as the party’s presidential pick.

Republican judicial advocate Mike Davis, a former top Senate aide mentioned for a future Trump administration position, circulated a letter outlining the next steps.

“Dear Republicans,” he said in a Friday post. If their response to the guilty verdict was “we must respect the process” or “we are too principled to retaliate,” he suggested they do two things: One was an expletive, the other: “Leave the party.”

Sen. Mike Lee, R-Utah, circulated his own letter in which he suggested it was the White House that “made a mockery” of the rule of law and altered politics in “un-American” ways. He and other senators threatened to stall Senate business until Republicans take action.

“Those who turned our judicial system into a political cudgel must be held accountable,” Lee said.

Associated Press writers Michelle L. Price, Ali Swenson and Chris Megerian contributed to this story.

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Forwarding of divorce bill to Senate on hold

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MANILA, Philippines — The transmission of the absolute divorce bill from the House of Representatives to the Senate has been deferred pending questions about the final vote count when the lower chamber passed it on its third and final reading on May 22.

In a message to the Inquirer on Tuesday, House Secretary General Reginald Velasco said the move was meant to “set the record straight” on the final voting for House Bill No. 9349. A total of 126 lawmakers voted in favor of the bill, 109 were against it while 20 abstained.

The next morning, however, the count of those who approved the bill was amended to 131. This prompted former Senate President Tito Sotto and other opponents of the bill, like conservative evangelists Manila Rep. Bienvenido Abante and Cibac Rep. Eddie Villanueva, to question the validity of the vote.

READ: House OKs divorce bill: ‘No monster’

Sotto argued that the measure could not be considered passed as it did not get the majority vote. In the Senate, the nay votes are counted with the abstained votes, so the final results would have resulted in the majority not voting in favor, 126-129.

But Velasco clarified that under House rules, abstentions are not counted as votes, meaning the bill would have passed via majority anyway, whether the Yay votes were at 126 or 131.

Count to be clarified

He said that the matter would be clarified during the resumption of the session on July 22.

In the Senate, members appear to be almost evenly divided against the bill based on the informal survey conducted by Senate President Pro Tempore Jinggoy Estrada.

In a list Estrada released to Senate reporters on Tuesday, there were at least six senators in favor of the measure, while five were opposed.

“I conducted a survey on my own and asked my fellow senators, my colleagues, [about] their thoughts on the divorce bill,” he said.

Asked if its approval in the House would put pressure on the Senate to pass its own version, Estrada replied, “It’s not our priority bill.”

Senators in favor of the divorce law, according to Estrada’s survey, were Robinhood Padilla, Grace Poe, Risa Hontiveros, Imee Marcos, Pia Cayetano and Raffy Tulfo.

Those against it were Estrada, along with Senate President Francis Escudero, Majority Leader Francis Tolentino, and Senators Joel Villanueva and Ronald “Bato” dela Rosa.

“I have been and still am not in favor of legalizing divorce in our country. Instead of pushing for an absolute divorce law, which is proscribed by the Constitution, perhaps a bill with a well-defined ground for nullifying a marriage would be a much-welcomed alternative,” said Estrada.

“Instead of divorce, why don’t we just study how the process of getting an annulment can become easier and more acceptable?…and maybe we should just expedite annulment cases because, let’s face it, annulment is quite expensive,” he added.

More affordable

Escudero is also against a measure that would allow an absolute divorce in the country. Instead of a divorce bill, he said the existing process of annulment under the Civil Code should be made more affordable and accessible to Filipinos.

For Villanueva, divorce would only encourage spouses to separate over petty quarrels. “Maybe there will be a drive-thru, a long line of those wanting to get divorced over petty reasons. ‘I didn’t like your hairstyle, let’s get divorced’, ‘I didn’t like the way you wash my clothes, let’s get divorced’. That’s what will likely happen. Maybe we are not ready for that,” said the senator, whose father is an evangelist.

“We in the Senate are willing to scrutinize and study carefully what will be the effect of this, what will be the effect on the Family Code, what will be the effect on every Filipino family,” he added.

Sen. JV Ejercito said that while he was still in the process of discernment, “I am leaning at this time to be in favor.”

“I was raised a Roman Catholic, I understand the defense of the Church on the sanctity of marriage. But I also know that a lot of Filipino couples are trapped in loveless and unworkable marriages. It is not their fault. Sometimes things just don’t work out. I also believe that everyone deserves another chance to be happy in life,” he added.

“This is a difficult issue…I intend to listen, and participate actively, in the deliberation in the Senate,” he said.

Minority Floor Leader Aquilino Pimentel III, on the other hand, said that he could not vote for the bill based on what he has heard in the news about its contents.

Other senators, meanwhile, like Sen. Sonny Angara and Ramon Revilla Jr., remain undecided.

House Bill No. 9349, or the Absolute Divorce Bill, principally authored by Albay Rep. Edcel Lagman, gives spouses in irremediably failed marriages a “fourth mode” of dissolving an “irreparably broken or dysfunctional marriage” based on limited grounds. The other three allowed under the Family Code are canonical dissolution, annulment, and legal separation.

If enacted into law, the bill would actually “reinstate” divorce in the country, as it was legal during the American colonial era and then abolished during the Japanese occupation.

Currently, the Philippines is one of only two countries in the world that still does not allow divorce as a means to end a marriage. The other one is the Vatican, the seat of the Roman Catholic Church.

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The last time a divorce bill cleared final reading was during the 17th Congress, but it languished in the Senate. In fact, the current Senate version of the divorce bill, SB No. 2443—filed by Hontiveros, Tulfo, Padilla, Cayetano and Marcos—hurdled the committee level last year for the first time since 1986, but has yet to move forward.

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What is Absolute Assignment in Life Insurance?

Absolute Assignment Clearly and Briefly Explained

Absolute Assignment

Insuranceopedia Explains Absolute Assignment

Related Definitions

What Is Absolute Assignment In Insurance?

What does absolute mean in insurance?

What is assigned in an absolute assignment of a life insurance policy?

Absolute Assignment Clearly and Briefly Explained

What is conditional assignment and absolute assignment?

Can absolute assignment be revoked?

What is an Insurance Assignment?

Absolute Assignment

Why an Insurance Assignment?

How do you perform an Assignment?

Assignment to a Company

What are the consequences of an absolute assignment?

How many types of insurance assignments are there?

What is the difference between nomination and assignment?

What is difference between assign and transfer?

LESSON 3: LIFE INSURANCE POLICIES, PROVISIONS, OPTIONS AND RIDERS

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2 Ways to Transfer Ownership of a Life Insurance Policy

Requirements

Absolute Assignments

Tax Implications

Nontax Implications

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WHAT IS ABSOLUTE ASSIGNMENT?

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What is Assignment and Nomination in Life Insurance?

What is assignment in life insurance?

Types of Assignment

1. Absolute Assignment

2. Conditional Assignment

Key Points to know Note About Assignment

What is nomination in life insurance?

Types of Nominees

1. Beneficial Nominees

2. Minor Nominees

3. Non-family Nominees

4. Changing Nominees

Key Points to Note About Nomination

What is the difference between nomination and assignment?

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