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Assignment Of Life Insurance Polocy As Collateral
1. Assignment. For value received, _______(1)_______, of
_________(2)___________, assignor, hereby assigns, transfers, and delivers to
_________(3)___________, of _________(4)_________, assignee, __(5)__ successors or
assigns, policy No. __(6)___, issued by ________(7)_________, insurer, and any
supplementary
contract issued in connection therewith on the life of ______(8)_________, of
________(9)__________, and all my right, title, and interest therein except as provided in
Section 3 hereof, subject to all the terms and conditions of the policy and to all
superior liens, if any, that insurer may have against the policy.
2. Rights of assignee. Assignor agrees that the following specific
rights pass to assignee by virtue of this agreement:
a. The sole right to collect from insurer the net proceeds of the
policy when it becomes a claim by death or maturity;
b. The sole right to surrender the policy and receive the surrender
value thereof at any time provided by the terms of the policy and at such other times as
insurer may allow, and the full right to obtain one or more loans or advances on the
policy from insurer, such rights subject however, to the provisions of Section 5a hereof;
c. The sole right to collect and receive all distributions or shares of
surplus, dividend deposits, or additions to the policy now or hereafter made or
apportioned thereto, and to
exercise any and all options contained in the policy with respect thereto; provided, that
unless and until assignee shall notify insurer in writing to the contrary, the
distributions or shares of
surplus, dividend deposits, and additions shall continue on the plan in force at the time
of this assignment; and
d. The sole right to exercise all nonforfeiture rights permitted by the
terms of the policy or allowed by insurer and to receive all benefits and advantages
derived therefrom.
3. Rights reserved by assignor. It is expressly agreed that so long as
the policy has not been surrendered, the following specific rights are reserved and
excluded from this assignment and do not pass to assignee by virtue hereof:
a. The right to collect from insurer any disability benefit payable in
cash that does not reduce the amount of insurance;
b. The right to designate and change the beneficiary; and
c. The right to elect any optional mode of settlement permitted by the
policy or allowed by insurer.
4. Indebtedness secured. This assignment is made as collateral security
for any and all indebtedness of assignor to assignee, either now existing or that may
hereafter arise between assignor and assignee. Assignee agrees to apply any and all money
received from insurer to the satisfaction of such indebtedness, and to pay to assignor,
his legal representatives, heirs, or assigns, any balance remaining after payment of the
indebtedness existing at the time of such payment.
5. Covenants of assignee. Assignee covenants that:
a. Assignee will not exercise either the right to surrender the policy
or, except for the purpose of paying premiums, the right to obtain policy loans from
insurer, until there has been
default in any of the then existing indebtedness secured by this assignment or a failure
to pay any premium when due, or until thirty (30) days after assignee shall have mailed to
assignor, at
the address last supplied in writing to assignee, notice of intention to exercise such
right, with specific reference to this assignment; and
b. Assignee will, on request, forward without unreasonable delay to
insurer the policy for endorsement of any designation or change of beneficiary or any
election of an optional mode of settlement.
6. Payment of charges on policy. Assignor agrees to pay, and assignee
shall be under no obligation to pay, any premium, or the principal of or interest on any
loans or advances on the policy whether or not obtained by assignee, or any other charges
on the policy. However, any such amounts so paid by assignee shall become a part of the
indebtedness hereby secured, shall be due immediately, and shall draw interest at the rate
of _(11)_ percent (_(12)_%) per year from date of payment.
Dated ________(13)____________, 19_(14).
_____________(15)______________
NOTICE
The information in this document is designed to provide an outline that
you can follow when formulating business or personal plans. Due to the variances of many
local, city, county and state laws, we recommend that you seek professional legal
counseling before entering into any contract or agreement.
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