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Assignments under Hong Kong life insurance plans happen in two ways.
In this case the assignee is only able to receive the loan amount plus any interest from the policy in the event of the insured’s death.
In order for either type of assignment to be undertaken it must first be ensured that the rights of any named beneficiaries under the policy at the time of the assignment are not violated.
A husband may assign his policy to his wife, for example.
However the assignment occurs, there are a number of conditions which should be understood in relation to assigning the rights to a Hong Kong Life Insurance plan.
In the event that you have any additional questions about Life Insurance Assignments and Transfers under a Hong Kong Life Insurance plan, please Contact Us to speak with an expert advisor today!
A collateral assignment of life insurance is a conditional assignment appointing a lender as the primary beneficiary of a death benefit to use as collateral for a loan.As such, the policyholder (assignor) is entitled to sell his plan to a third party, who would become the assignee and receive all benefits of being the new policyholder.Not all assignments require a sale, in some cases a policyholder may gift his policy to another party.If the borrower is unable to pay, the lender can cash in the life insurance policy and recover what is owed.Businesses readily accept life insurance as collateral due to the guarantee of funds if the borrower dies or defaults.As such, the assignee receives the Net Policy Proceeds and not the full amount.If you would like to receive free advice for life insurance in Hong Kong, or if you would like to learn more about assignments under a Hong Kong life insurance plan, please complete the short form at the top of this page.This means that, in the event of a Beneficiary being named an Irrevocable Beneficiary they would not be removed from the policy.Additionally, the assignment must not be for any illegal purposes, such as money laundering.Any type of life insurance policy is acceptable for collateral assignment, provided the insurance company allows assignment for the policy.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.