DIY Legal Forms

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Assignment Of Life Insurance Policy As Security

1. Identity of Parties and Loan. The Undersigned is indebted to [name], having its principal office at [address] (Lender), under a promissory note dated [date], in the original principal sum of ........ dollars ($........) (Loan). This Assignment is made as collateral security for any and all liabilities under the Loan.

2. Assignment of Policy. The Undersigned assigns to Lender policy number [number] issued by [name] (Insurer), and any supplementary contracts issued in connection with such policy, that insures the life of [name] (Policy), and all claims, privileges, rights, and interest in the Policy. This Assignment is subject to the terms of the Policy.

3. Lender's Rights. Without limiting the general assignment to Lender contained in Paragraph 2, it is specifically agreed that the following rights are assigned to Lender:

(a) Insurance Proceeds. The sole right to collect the proceeds of the Policy when a right to such proceeds exists, due to death or otherwise;

(b) Right to Surrender. The sole right to surrender the Policy, as provided by its terms, and to collect the surrender value;

(c) Loans. The sole right to obtain loans and advances based on the Policy, either from Insurer or from third parties, and to pledge the Policy as security for such loans or advances;

(d) Nonforfeiture Rights. The sole right to exercise all nonforfeiture rights existing under the Policy or granted by Insurer and to receive all benefits derived therefrom;

e. Distributions. The sole right to receive all distributions or shares of surplus, dividend deposits, or additions to the Policy, and exercise all options with respect to such distributions or shares, deposits, or additions, provided, however, that until Lender notifies Insurer in writing of Lender's decision to avail Lender of such right, the distributions or shares, deposits, and additions shall continue in the manner in force as of the date of this Assignment.

4. Exclusions as to Rights Assigned. The following rights are not assigned to Lender:

(a) Disability Benefits. The right to collect from Insurer any disability benefit that becomes payable and does not reduce the amount of insurance;

(b) Beneficiaries. The right to designate and change the Beneficiary under the Policy, subject, however, to the rights of Lender under this Assignment;

(c) Settlement Mode. The right to elect any optional mode of settlement that is allowed under the Policy or by Insurer.

However, it is expressly agreed that the exclusion of these rights does not impair, in any manner, the right of Lender to surrender the Policy or otherwise impair the assignment of rights specified in this Assignment.

5. Lender's Obligations. Lender agrees to the following:

(a) Excess Proceeds. It will pay to the person(s) entitled to such sums under the terms of the Policy all sums received from Insurer after payment of all sums payable to Lender under the Loan:

(b) Default as Prerequisite. It will not surrender the Policy or obtain policy loans from Insurer (except if the proceeds are used to pay unpaid premiums) unless and until

(i) there has been a default under the Loan or there has been a failure to pay the premium due under the Policy and

(ii) Lender has provided the Undersigned with written notice of such default or failure and it is not cured within [number] days from the date such notice is sent;

(c) Indorsements. It will, on request, promptly forward the Policy to Insurer for endorsement of any designation or change in Beneficiary or any election of an optional mode of settlement;

d. Premiums and Other Payments. Lender has the option, but is under no obligation, to pay any unpaid premiums due under the Policy and the principal and interest of any loans or advances on the Policy, whether obtained by Lender or others. Any amounts paid by Lender from Lender's own funds become part of the liabilities secured under this Assignment, are due and payable immediately upon demand, and bear a rate of interest of ........ percent (........%) per annum.

6. Proof of Entitlement. Insurer is authorized to recognize Lender's rights under this Assignment, including the right to receive the proceeds of the Policy, without the need to investigate the entitlement of Lender. Lender's written demand or authorization is all that is necessary to permit Insurer to recognize Lender's rights, and Insurer is thereby fully released and discharged from all liability.

7. Other Security. Lender may take other security for the Loan and, from time to time, release any such security at Lender's option. Lender may use the proceeds of the Policy or any sums received under this Assignment to satisfy the Loan without resorting to any other security in order to satisfy the Loan.

8. Conflicting Terms. If there is any conflict between the terms of this Assignment and the item of the Promissory Note or other documents executed in connection with the Loan, the terms of this Assignment shall prevail.

[dated]

[signature]

Insured

Agreed and accepted:

[signature]

Beneficiary

[signature]

Insurer

This Section for Notary:

Acknowledgment

STATE OF -------)

) ss: [date]

COUNTY OF ------)

On [Date] before me, [Name of Notary], notary, personally appeared [Name of Person(s) Involved], personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

Witness my hand and official seal.

[signature]

[Name of Notary Public]

My commission expires: [date]

(Seal)