Assignment
The transfer of ownership or some of the rights of a life insurance policy from one person or entity to another.
Detailed Explanation
This might be done for estate planning purposes or as collateral for a loan.
Practical Example
David needed to secure a business loan. As part of the loan agreement, he assigned his life insurance policy to the bank as collateral, meaning the bank would receive the death benefit if he passed away before the loan was repaid.
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