Acknowledgement of Assignment
After the Notice of Assignment is submitted to the insurance company, it will take about a week to send a written receipt of acknowledgement to both the Assignor and Assignee to update that the ownership of the policy had been transferred.
It is a legal transfer of policy ownership and all of its rights from the Assignor to the Assignee.
The Assignor is the current policyowner who is transferring all of its right to another party.
The Assignee is the party whom all rights of the policy are transferred to and will become the new policyowner.
Automatic Premium Loan (APL)
Any premium due at the end of the grace period will automatically be paid using the existing cash value. If there is no cash value, the policy will lapse. Interest will be charge on the outstanding premium loan.
Cash Value of Insurance Policy
It is also known as surrender value and is the amount payable to the policyowner when a life insurance policy is surrendered. The amount can be obtained by calling the insurance company.
Cash in Insurance Policy
It is the process by which the policyowner surrender the insurance policy for the cash value. Usually the insurance company will issue a cheque on the same day and the insurance contract will then be terminated.
Deed of Assignment
It is the agreement document of Assignment. Most insurance companies have their own in-house Assignment forms.
It is a saving plan with insurance coverage, usually has a fixed maturity date and is commonly used for educational or retirement planning.
Investment Linked Policy
It is an insurance policy in which the premiums paid are used to purchase units in investment funds. The value of the units is dependent on the investment performance of the funds.
Notice of Absolute Assignment
To effect the transfer of ownership, a Notice of Assignment has to be submitted to the insurance company. The deed of absolute assignment can serve as notice or a separate notice can be used. The priority of rights of the policy will be the date stated on the Assignment form or the date the notice was received by the insurance company whichever is later.
Paid Up Policy
It is one of the non-forfeiture options which allows a policy to continue without further premiums for a lower sum assured.
The policyowner can apply for a loan up to 90% – 95% of the cash value. Interest rates of 5.5% – 8% p.a. vary with insurance companies.
A policy being terminated for the non-payment of premiums before the policy has a cash value or after the cash value has been depleted from APL. A lapsed policy can usually be reinstated within 12-24 months after the outstanding premiums have been paid with interests and declaration of health status subjected to underwriting.
It is the guaranteed amount payable in the event of a claim or upon maturity.