I have given my life insurance policy as collateral for my home loan. For this I had to assign my policy in favour of the bank. Can I cancel this assignment at any future date? How will I get my policy back?Assignment is a means whereby the beneficial interest, rights and title under a policy get transferred from the assignor to the assignee. ‘Assignor’ is the policyholder who transfers the title and ‘assignee’ is the person who derives the title from the assignor. When you assign the life insurance policy in favour of a bank or any financial institution, as a collateral security, the nature of assignment is conditional. This means that as and when the loan is cleared, the rights under the policy are transferred back to the assignor.
You can’t cancel the assignment yourself. Once the loan gets cleared, you will get the policy back.
