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📋 '''Assignment of insurance''' is the legal transfer of rights, benefits, or interests under an [[Definition:Insurance policy | insurance policy]] from the original [[Definition:Policyholder | policyholder]] (the assignor) to another party (the assignee). In insurance practice, assignment most commonly arises in [[Definition:Life insurance | life insurance]] and [[Definition:Property insurance | property insurance]] when a policyholder pledges coverage as [[Definition:Collateral | collateral]] for a loan, sells insured property to a new owner, or transfers policy benefits as part of a business transaction. Unlike a simple change of beneficiary, an assignment conveys contractual rights under the policy itself, which carries distinct legal and [[Definition:Underwriting | underwriting]] implications.

⚙️ Two broad categories govern how assignments function. An absolute assignment transfers all rights and interests in the policy permanently to the assignee, who then becomes the party entitled to all policy benefits — common when life insurance policies are assigned to lenders or transferred between family members in estate planning. A conditional or collateral assignment transfers only a limited interest, typically the right to receive proceeds up to the amount of an outstanding debt, with remaining benefits reverting to the original policyholder or their [[Definition:Beneficiary | beneficiaries]]. Most [[Definition:Insurance carrier | insurers]] require written notice of assignment and may impose conditions outlined in the policy's terms. In many jurisdictions — including under English common law, the U.S. Uniform Commercial Code framework, and civil-law regimes across Europe and Asia — the insurer's consent is not required for life policy assignments but is necessary for [[Definition:Property and casualty insurance | property and casualty]] policies, because the identity of the insured materially affects the [[Definition:Risk profile | risk profile]].

🔑 Proper handling of assignments is critical to avoiding coverage disputes, particularly when insured assets change hands. In property lines, an unauthorized assignment may void coverage entirely, leaving the new owner unprotected at the moment of [[Definition:Loss | loss]]. Lenders routinely require collateral assignments on policies covering financed assets — from commercial real estate to [[Definition:Aviation hull and liability insurance | aircraft]] — to ensure their financial interest is protected if a [[Definition:Claim | claim]] arises. For insurers, tracking assignments accurately is an operational necessity: it affects [[Definition:Claims handling | claims payment]] routing, [[Definition:Subrogation | subrogation]] rights, and compliance with [[Definition:Anti-money laundering (AML) | anti-money laundering]] regulations. In life insurance markets across India, Japan, and other jurisdictions with large bancassurance channels, assignment provisions are a routine part of policy administration tied to loan origination.

'''Related concepts:'''
{{Div col|colwidth=20em}}
* [[Definition:Insurance policy]]
* [[Definition:Beneficiary]]
* [[Definition:Collateral]]
* [[Definition:Subrogation]]
* [[Definition:Insurable interest]]
* [[Definition:Policy endorsement]]
{{Div col end}}

Definition:Assignment of insurance - Revision history

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