re assignment form lic

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Assignment in LIC Policy

The process of transferring the title rights, and interest on assets or property from one person to another person is known Assignment. Assignment is generally done to provide security against loan

Assignor : The person or policy holder who transfers the title on the assets or property is known as the assignor

Assignee : The person to whom the title on assets on property is transferred is known as the assignee.

Feature of Assignment in LIC Policy

• Assignment can be done only after purchase of a policy
• Assignment is applicable to all kinds of insurance plans except pension plans
• Assignor should have complete ownership of the policy. The life assured is minor of is not the policy holder or proposer, does not have any rights over the policy, hence cannot assign the policy
• After assignment the assignee gets complete ownership and rights over the policy including death benefit. He can even surrender the policy
• Assignment can be done towards a person or an institution
• Insurer has to record the fact of the assignment in their record
• Assignment once made cannot be cancelled. Policy can be re-assigned in the name of the life assured.
• The policy would be re-assigned to you and the repayment of the loan. A fresh nomination should be done after assignment of the policy

Types of Assignment

There are two types of assignment:

• Conditional Assignment: In this type of assignment, the rights, title and interest in the policy automatically revert back to the assignor:

The conditions are:

• On the death of the assignee before the death of the assignor
• The assignor survives the date of maturity of the insurance policy
• The loan is repaid

If the condition becomes effective it is automatic revert back to the assignor

• Absolute Assignment: In this type of assignment the rights, title and interest of the assignor passes completely to the assignee. Absolute assignment is generally done for valuable consideration the policy vests in the assignee absolutely and forms part of his estate on his death.

Documents Required:

• Original bond paper (for pasting endorsement)
• KYC Documents
• Assignment form 3855
• Re-assignment form 3848

Process of assignment in LIC Policy:

The assignment can be done by either of the following process:

• Making an endorsement on the LIC Policy document, In this process the stamp duty is not required. The assignment form along with the policy should be duly signed by the assignor, assignee & a witness.
• Execute a separate assignment deed in this case stamp duty needs to be paid.
• The assignment will be effective when the insurer only if it is registered with the insurer in their records. The date on which the notice of assignment is delivered to the insurer shall  regulate the priority of all claims under a transfer or assignment.

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Lic policies, assignment and bank loans.

Banks accept LIC policies assigned in their favour as security for loans to be sanctioned.  A charge in favour of the bank over the LIC policy is created by assignment of LIC Policy. 

Which are the types of LIC policies accepted by banks? 

Banks normally accepts the following categories of policies:

a) Endowment Policies b) Whole Life Policies (limited payments or otherwise) c) Joint Life Policies

Some banks accept Children’s Deferred Assurance policies after the policies are adopted by the life assured on their attaining majority. Policies assured on the lives of minors are also accepted after the policies are assigned in favour of said minors on their attaining majority. 

Which are the types of LIC policies not accepted by banks? 

The following categories of L.I.C. policies are not accepted by banks, mainly because they are not assignable. 

a) Children’s Endowment Policy b) Children’s Deferred Assurance c) Policies with nominations under “Married Women’s Property Act”. d) Policies taken out especially for the purpose of Estate Duty and the like.

Whether policies of New Private Sector Insurance companies acceptable? 

The Policies issued by new Private Sector Insurance Companies approved by IRDA, are accepted by banks, if

1.    The insurance company issue surrender value certificate and 2.    The policy is assignable in favour of the bank. 

What is meant by assignment? 

Assignment means transfer of a right over a property existing or future, or debt by one person to another. Life insurance policies and book debts are two classes of securities, rights over which can be transferred by assignment. Nomination under the Insurance Act is automatically cancelled on assignment. Hence nominees need not join the assignment process. 

When a policy is assigned in favour of a bank, it can enforce the right by surrendering the policy to the policy issuer and obtaining the surrender value. This is done after serving a notice of demand on the assignor on default. 

What are the conditions to be satisfied for assignment of policy?

1.    If there is any existing assignment on the policy, it should be reassigned in favour of the assured.  2.    The assigner should assign the policy in favour of the bank by executing the assignment form/ notice of assignment.  3.    The bank forwards the policy along with assignment form/ notice of assignment to the insurance company for registration of the assignment in their books.  4.    Insurance company returns the policy to the bank after noting the details in their records and the bank keeps the assigned policy in its files.  

What happens on the death of assured before settlement of liability?

When a policy is assigned in favour of another person or bank, the assured is transferring all future rights over the policy in favour of the assignee. Hence, in case of death of assured before settlement of the dues of the bank, bank lodges its claim before the insurance company supported by the death certificate and the assigned policy. The insurance company releases the amount in favour of the bank. 

What is insurable interest? 

Insurable interest arises if beneficiary happen to sustain monetary loss as a result of the death of the life assured.  Insurable interest is of a pecuniary nature. 

Husband has an insurable interest in the life of his wife and vice versa An employer has an insurable interest in his employee and vice versa. 

What are the precautions taken by bank while accepting LIC policies?

1.    The age of the assured is got admitted by the LIC.  2.    The policy is an assignable policy and does not belong to the non – acceptable categories.  3.    The surrender value and paid up amount of the policy is obtained.  4.    The policy is in force and the premium is paid up to date by obtaining latest premium paid receipt.  5.    No prior assignment exists/ all previous assignments are cancelled.  6.    The assignment of policy in favour of the Bank is duly registered with the insurance company.  7.    If the Insurance Policy offered as security is on the life of a person other than the borrower, the bank ensures that  the borrower has an insurable interest in  the life of the assured.

What is meant by re-assignment?

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LIC Assignment Cancellation Form PDF Details

The Life Insurance Corporation (LIC) Assignment Cancellation form is a critical document designed for the specific purpose of legally transferring ownership rights of an insurance policy from the assignor to the assignee. This document plays a vital role in the context of life insurance, where policyholders may need to assign their policy for valuable consideration, effectively changing the beneficiary of the policy from themselves to another party. It meticulously outlines the procedure for executing such an assignment, emphasizing the necessity of proper documentation and adherence to legal requirements including the use of appropriate stamp paper, if applicable, and the importance of executing the assignment in the presence of a witness. Furthermore, the form underscores the need for the delivery of the policy or the deed of assignment to the relevant LIC office for the registration of the assignment, without which the assignment will not be recognized by LIC. Notably, the form also includes instructions for ensuring that proper stamp duty has been paid, specifying the required details of the assignee, and necessitating the acknowledgment of the actual consideration received by the assignor from the assignee. This detailed procedural guideline ensures that all parties are fully informed of their rights and obligations, making the assignment process transparent and legally sound.

Form Preview Example

FORM OF ASSIGNMENT OF POLICY FOR VALUABLE CONSIDERATION

(Absolute Assignment)

Note : THIS FORM SHOULD NOT BE FILLED IN. The wording of the form, if found suitable, should be copied out either on the back of policy itself, or in the alternative, on a proper stamp paper of the requisite value.

(FOR INSTRUCTIONS RE: EXECUTION OF AN ASSIGNMENT SEE REVERSE)

Signature of Life Assured

Designation :- _____________________________

Address :- ________________________________

Place : _____________________

Date :- _____________________

The Senior / Branch Manager,

Branch No. ________________

Life Insurance Corporation of India,

Policy No. ________________________Own Life

I hereby give you notice that I have assigned the above policy to :

On ___________Please acknowledge receipt of this notice and forward the enclosed Policy/Deed

Of Assignment to ___________________after registering the assignment thereon in your Books

Certified that the thumb impression here in is

That of _______________________________________________

Who admits having affixed the same after understanding the contents hereof

?? Notice Should be given by assignor or his/her duly authorised Agent.

The assignor's thumb impression to the form should be attested by a Magistrate or justice of the Peace or a Gazetted Officer. An officer or Development officer of atleast 3 years standing or confirmed Development Officer recruited from the Agents, who were DM or BM club members before joining or Development officer recruited from agents who were ZM or Chairman's club members before joining Provided he / she is fully satisfied about the identity of the person. The attesting witness should certify as above

INSTRUCTIONS

(1) After making such alteration, if any as may be deemed necessary in the case under consideration, the form printed on the reverse should be copied either on the back of the policy, in which case no stamp duty will be payable or on a separate (Special adhesive or non-judicial ) Stamp paper of the appropriate value. Parties to the Assignment should satisfy themselves before forwarding the policy or the Deed of Assignment, as the case may be as regards proper Stamp duty having been paid thereon.

(2) The full name, and age, of the Assignee must be stated.

(3) The actual consideration for the assignment received from the assignee should be written in words, not in figures.

(4) The Assignor must affix his signature to the Assignment in the presence of a witness other than the Assignee. If the Assignor is not conversant with English, he must sign the Assignment before an English-knowing person and if he be illiterate, he must affix his thumb impression to the Assignment before a magistrate a justice of peace or Gazetted Officer. An Officer or Development Officer of Atleast 3 Years standing or confirmed Development Officer recruited from the Agents, who were DM or BM club members before joining or Development Officer recruited from Agency who were ZM chairmans club members before joining provided he/she is fully satisfied about the identity of the person executing the assignment. The Witness in such cases should certify as follows :-

" Certified that the contents of the above Assignment were explained by me to the Assignor Mr.____________________________in Vernacular and that he affixed his signature / Left thumb impression there to in my presence after thoroughly understanding the same.

(5) Signature or any other matter written in Vernacular should have the english translation therof written beneath the same.

(6) Immediately after an assignment has been executed the Policy or the deed of Assignment must be sent to the Divisional Office of the Corporation at________________________

__________________________for registration of the assignment accompanied by anotice in writing of the assignment. Preferably in the form printed on the reverse. Except as otherwise provided any law in force at the place where the policy moneys are payable in terms of policy contract. An assignment other than one in favour of the corporation will not me be operative as against the corporation(and will not confer upon the assignee or his legal representatives any right to sue for the policy moneys) unless a notice in writing of the assignment and the policy bearing the assignment or the assignment deed in original or the copy of the assignment certified to be correct by both the assignor and the assignee or by the duly authorised agents are delivered to the corporation and priority of claims under the assignment will be governed strictly by the order in which notices of assignment have been received at the divisional office of the corporation through which the policy is issued and not by dates of execution of assignment.

(7) When the policy is to be assigned by way of security or mortgage only and not absolutely it is advisable to consult a legal advisor as to form of assignment to be used, amount of stamp duty etc.

Form No. – 3848 p.i./15,000 f / 12-99

How to Edit LIC Assignment Cancellation Form Online for Free

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Step 1: Click the "Get Form" button above. It's going to open our pdf tool so you can start filling out your form.

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This document requires specific info to be filled in, so make sure to take whatever time to enter exactly what is asked:

1. Fill out your reassignment form lic with a number of major blank fields. Note all of the required information and make sure nothing is omitted!

2. Right after this selection of blank fields is completed, go on to enter the suitable information in all these - I in Consideration of the sum of.

3. The third stage is normally straightforward - fill in every one of the form fields in Place Date, The Senior Branch Manager Branch, Policy No Own Life, Dear Sir I hereby give you notice, and Here mention the name and address in order to finish this segment.

4. Your next section will require your input in the following parts: Dear Sir I hereby give you notice, Certified that the thumb, That of Who admits having affixed, Yours faithfully, and SignatureThumb Impression of. Just be sure you provide all of the needed info to move further.

5. Since you approach the final parts of the file, you will find several extra things to complete. Specifically, than the Assignee If the Assignor, Signature or any other matter, written beneath the same, Immediately after an assignment, and for registration of the assignment must all be filled out.

Many people often make some mistakes while completing than the Assignee If the Assignor in this part. You need to reread whatever you enter here.

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