What is an Insurance Assignment?
Insurance Assignment is the transfer of ownership from the Policy Owner (Assignor) to another person or institution (a.k.a. Assignee). The Assignee has control of the insurance policy as if the Assignee is the Policy Owner. There is no change to the life assured in the policy and the policy remains the same.
There are 2 types of assignments:-
- Absolute Assignment: Complete rights and ownership of the policy transferred to the Assignee.
- Conditional Assignment: Rights and ownership of the policy under certain conditions to the Assignee. (i.e. as collateral for a loan for a term of 30 years)
Why an Insurance Assignment?
- As a gift or voluntary transfer.
- For settlement; transfer the policy to trustees to give effect to successive or contingent interests.
- Assignment to a trustee for the benefit of creditors.
- Transfer to existing trustees of a settlement, or to beneficiaries in pursuance of the trusts.
- As a ‘keyman business insurance policy’, to make sure that the company or person receives the money for business continuity upon death of the life assured.
- Mortgage, transfer of mortgage, or reassignment on repayment.
- For tax purposes.
How do I perform an Assignment?
- Both parties (assignor and assignee) must be present at customer service counter.
It’s best to call and arrange an appointment beforehand. - Staff explains in detail on assignment (absolute/conditional) and policy benefits before signing forms
- Assignor has to revoke existing nominee(s), if any.
- Client has to prepare own RM10 ‘Hasil stamp’ (can be purchased at post office) for assignment contract stamping and pay a small (RM2) processing fee.
Note: The above process of assignment may be for a certain insurance company only. Please check with your insurer or agent.
