What Is Assignment of Insurance?

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When it comes to assignment of insurance, it's exactly what it sounds like - your assigning your insurance to somebody else. Find out about assignment of insurance with help from an expert at Combs & Company in this free video clip.

Part of the Video Series: Insurance Questions Answered
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Video Transcript

Hi, my name is Susan Combs, and today we're going to talk about what is assignment of insurance. When it comes to assignment of insurance, it's exactly what it sounds like. Your assigning your insurance to somebody else. So typically this comes in to play in terms of say a collateral for a loan. So say you're going to take out a loan for a mortgage but you don't have enough cash on hand to secure that loan. So what they typically will do is ask you to have a life insurance policy and you assign the risk over to the mortgage company. So if God forbid you get hit by a bus then the mortgage company is going to be made whole first and then your other beneficiary will be given the rest of the money after that. So when it comes to assigning the risk it's nothing crazy. There has to be always an insurable risk to it has to be reason for it so you can talk to your broker about it or you can talk to the company that's requesting it and see what the actual specifications are for it and then you can kind of just go from there.

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