Our Company has a Collateral Assignment form available
for use by its policyowners. Some
banks and other lenders prefer to use their own collateral assignment forms. We
often accept other financial institutions’ forms; however, please
allow some extra processing time as these forms often require a legal review.
Please note that Security Mutual Life requires an original
copy with the ink signatures of the Collateral Assignment. If you
and/or the assignee wishes to have an original signed copy for your records
as well, please submit multiple originals.
Please be aware that a Collateral Assignment establishes
your policy as a collateral security between the Policyowner and the
Assignee. It
gives the Assignee the right to collect the amount of the policyowner’s
indebtedness from the proceeds of the policy at death or at maturity, or
the cash surrender of the policy at any time. Only the balance of
the proceeds, if any, will pass to the beneficiaries under the policy.
Once added, both the Policyowner and the Assignee will have to sign for
any change to the policy that will decrease policy values or face amount.
Other Conditions of a Collateral Assignment are listed on the form itself.
