WAEC - Insurance (2017 - No. 27)
Life policies can be used as a collateral for loan when the policy has?
ceased to be life
been temporary suspended
acquired surrender value
been made paid-up
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A collateral assignment of life insurance is a conditional assignment appointing a lender as the primary beneficiary of a death benefit to use as collateral for a loan. If the borrower is unable to pay, the lender can cash in the life insurance policy and recover what is owed.
'Surrender Value': It is the amount the policyholder will get from the life insurance company if he decides to exit the policy before maturity.