The assignement form as Collateral for aLoan
How does the assignment work?
Please be aware that a Collateral Assignment establishes your policy as a 
collateralsecurity between the Policyowner and the Assignee. It gives the Assigneethe right to collect the amount of the policyowner’s indebtedness from the proceeds of the policy at death or at maturity, or the cash surrender of the policy at any time. Only the balance of the proceeds, if any, will pass to the beneficiaries under the policy. Once added, both the Policyowner and the Assignee will have to sign for any change to the policy that will decrease policy values or face amount. Other Conditions of a Collateral Assignment are listed on the form itself.
You have paid off your personal or business loan and the Collateral Assignment attached to my policy should be removed. What should you do?
If the original assignment was completed on an insurance company Collateral Assignment form, the assignee can usually complete the “Release of Collateral” section at the bottom of a copy of the original assignment. Many bank forms have a similar release section. If a copy of the original assignment is not available, please have the assignee complete the “Release of Collateral” section of a blank form. If the bank or lender to whom you have assigned your policy has closed or changed hands, the successor institution will need to release the assignment.
If you are unsure of your assignee’s successor, try the following FDIC website: http://www2.fdic.gov/idasp/main_bankfind.asp.
Be sure any person signing on behalf of a bank, lender, or other institution includes their title. If possible, please submit a copy of institutional documentation including names and titles of officers/signatories.
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