deed of assignment insurance policy

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All you need to know about assigning life insurance policy.

The insured needs to either endorse the policy document or make a deed of assignment and register the same with the insurer.

• Conditional assignment: This is done when the insured wishes to pass benefits of the policy to a relative in case of early death or certain conditions. The rights of the policyholder are restored once the conditions are fulfilled.
• Absolute assignment: This is done as a part of consideration for a loan in favour of the lender/bank/lending institution. In such an assignment, the insured loses his rights in the policy and the absolute assignee can deal with it independently.
• Proof of income.
• Self attested copy of photo ID and address proof .
• Self attested copy of PAN card.

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About this document

Use this deed to assign (transfer) a policy for life insurance or an endowment to another person. The reason could be any, but it should be a sale in which money changes hands.

We include reasonable warranties by the seller and undertakings by the buyer. It is clear and simple, but thorough and complete for an arm’s length transaction.

The transfer will be complete and valid only when the insurer has been formally notified.

As well as the deed document, we have included a template notice that the assignment has taken place. This may or may not be useful to you: your insurer may prefer you to use their own form, but sometimes other parties, like your bank, also need to know or appreciate being told.

We offer a  simpler version  if you are a trustee assigning the policy to a beneficiary.

If you are making or receiving a transfer as part of a divorce or separation, use this alternative document .

Completing this deed

For technical legal reasons , all assignments of life policies must be by deed and not by contract.

The main practical difference is that a deed requires a witness to the signatures. Unless it is more convenient to do otherwise, the same witness can verify the signatures of both parties.

Taxation of life assurance policies is complex and we recommend that you consult with a tax accountant. The effect of tax is also an important consideration in assessing the value to the assignee of the policy.

When to use this document

The deed can be used to assign a policy:

• from one individual to another, for payment or as a gift
• in a sale by the life assured to anyone or any company

Features and contents

The deed includes the following paragraphs:

• Warranties by the assignor
• The assignment
• Dispute resolution
• Severance and invalidity
• Notice of assignment to deliver to the insurer or bank

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Instructions

When making a transfer of ownership from the Policyowner (Assignor) to another person or company (Assignee), the Assignee will have full control of the policy as if he or she is the Policyowner.  Both the Assignor and Assignee should be 18 years old or older. If the Assignor or Assignee is below 18 years old, please contact our Client Services team at (65) 6833-8188 for assistance.  To perform an Assignment, please complete the  Deed of Assignment Form  and submit it to us with the necessary document(s) requested.

What you need to provide

Please refer to the “Assignment of Policy Checklist” found in the  Deed of Assignment Form .

Can a Deed of Assignment be performed for all policies?   Not all policies are eligible for a Deed of Assignment. Please refer to the “Assignment of Policy Checklist” found in the Deed of Assignment Form for the submission requirements.

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How to Assign a Mortgage Life Insurance Policy

Home » Blog » How to Assign a Mortgage Life Insurance Policy

Table of Contents

If you’re on this here blog, I can assume a couple of things:

• you’ve either bought or are buying a house and
• you’ve either bought or are buying Mortgage Protection or Life Insurance because you have to.

I can also probably assume you’re a responsible adult – or at the very least, you’re very good at pretending, which as we all know: all the best people are.

Now, there is one thing you need to know.

This one thing is either coming to you too late, or just in the nick of time, depending on whether or not you now own a house.

The banks are great for mortgages, but they’re a rip off when it comes to Mortgage Protection Insurance in Ireland.

They’ll try to force you to buy their Mortgage Protection (a type of Life Insurance that will pay off the rest of your mortgage if you die) because:

• It makes it harder for you to switch your mortgage (if the bank even mentions the words “block policy”, you should dive out the nearest window)
• It’s more money for them, especially if they hoodwink you into adding Serious Illness Cover, which will go directly into their pockets even if you need it for medical bills!

You’re basically paying them so they can pay themselves if you die or get sick before you’re done paying off your mortgage.

Yes, it sucks.

No, there’s not a massive amount you can do about it except arm yourself with all the information you can.

Which is why I’m going to talk you through Mortgage Protection, buying it, and assigning it to your bank/lender.

How do you assign a mortgage life insurance policy?

• Arrange your policy (through a broker preferably – scroll down to find out why)
• Complete a Deed  of Assignment (it forms part of your legal pack that the bank sends to your solicitor)
• Send the completed Notice of Assignment and your policy schedule to the bank
• The bank sends the Notice of Assignment and the policy schedule to the insurer
• The nsurer assigns your policy to the bank and sends a confirmation letter to the bank

And that’s it, fairly straightforward, ignore the bank if they try to spook you by saying it causes delays if you don’t buy from them. It doesn’t.

What is mortgage protection/life insurance for a mortgage?

As I said above: it’s a type of insurance that pays off the rest of your mortgage if you die. You have to get it if you’re buying a house. You can buy it from the insurer directly, your bank/lender, or a broker who will usually work with all the insurers.

You also have the option of using existing Life Insurance cover (for example, if you already have a policy) as your cover.

To make that crystal clear, your options are:

Mortgage lender/your bank:

• Tied to the bank so they can only sell you their overpriced Mortgage Protection policy.
• Your premium forms part of your mortgage repayments so it’s hard to see how much you’re paying for your policy.
• It’s potentially a problem because: you should always shop around at all of the insurers to make sure you get a good deal.
• You know how bankers get slated all the time for being more concerned with lining their own pockets? Yes. That. Think about it.
• If you have a health issue and they can’t offer you cover, then you’re on your own.

Insurance brokers:

• Will advise on policies from all the  providers to recommend the best deal for you.
• You get all the information, so you actually know what you’re dealing with.
• Heavily discounted premiums compared to the banks
• If you have a health issue and one insurer can’t offer you cover, your broker can try elsewhere.
• A sound bunch of lads
• Can only sell their own policies, so you’re definitely not getting the best deal for you.
• Probably shouldn’t do. Known for being occasionally nefarious, but you do you, boo.

An existing policy:

• It’s a bit confusing but you can use an existing Life Insurance policy as your Mortgage Protection, presuming it’s equal to the value of your mortgage and runs for the same term – so if your mortgage is for 30 years and €200,000, your Life Insurance policy would need to match or exceed that (e.g. a 31 year, €201,000 policy works ; a 29 year, €199,000 policy doesn’t)
• You have to assign the policy to your lender, if this is the case. Essentially, it’s you saying, “yes, I want to use my Life Insurance policy to pay off my mortgage.”
• If there’s any moolah left over afterwards, it’ll go to your dependents.
• You’re better off having both Mortgage Protection and Life Insurance because it’s two pay-outs, but if you’re strapped for the cash, or have had some health issues since you took it out, assigning an existing policy can be a solid shout.

If you’ve already bought your policy and are wondering about how to actually assign it, I get round to that in a second.

By the way, you can’t use life insurance that you have through work (death in service benefit) for a mortgage.

Is Mortgage Protection/Life Insurance different?

Yes. Mortgage Protection is a type of Life Insurance that only covers your mortgage to your lender. Life Insurance leaves a tax-free lump sum to your dependents. They could use it to pay for literally anything they want.

A $2,500 human-sized replica mask of your cat, for example .

Is it confusing? 100 percent.

Is it confusing on purpose? 100 per cent.

My two cents? Get Life Insurance and Mortgage Protection. It’s two pay-outs. It won’t break the bank monthly, but it could mean an awful lot to your family down the line.

Think of it like this: A Mortgage Protection payout gives your family a mortgage-free home. A Life Insurance payout gives your family a replacement income. They need both, so you need both.

Can you change your Mortgage Protection policy?

Yes. Any time you want. It could totally be worth it for a better price or benefits, so seriously: look into it. A few euro in the difference might not seem like much, but take that €5 a month and multiply it out by 12 and then by the length of your actual mortgage (which could be up to 35 years) and you’d be surprised how much it’ll add up to.

Just look at that fiver go. €5 x 12 x 35 = €2,100.

And that’s before we go anywhere near the difference you could save if you wanted to switch your actual mortgage down the line.

And don’t mind your bank if they say that getting Mortgage Protection or assigning an existing Life Insurance policy will delay your mortgage or that they’ll look more favourably on your application if you do what they want.

Remember: It’s all a

They’re trying to scare you into buying their overpriced policy.

Tell them where to go.

Because you already know where you can get the  best mortgage protection quotes .

Why do you need to assign a policy to a bank?

To make it legal.

Otherwise, it’s a bit like two young fellas swearing loyalty by spitting into a handshake. You telling your bank about your existing policy is grand and all, but if anything happens, they want the legal papers to say they get any payout.

Otherwise, all they’ve got is a spitty handshake and no cover.

How do you assign a Life Insurance policy to a bank/your lender?

It’s a bit like giving your bank a gift. You take out the policy and pay the premiums. When you die (no ‘ifs’ here, pal), your bank gets any pay-out.

To assign the policy (or policies if you have taken two single life policies) you need to complete a deed of assignment for each policy,

The deed is a legal document that forms part of your legal pack. It’s written in legalese, which means it’s completely impenetrable to normal people.

You can try reading it, but honestly, you’ll have as much luck taking another crack at Finnegans Wake. At least then you can sound cultured if you pretend you read Joyce’s gibberish.

You have to sign the deed of assignment.

Listen, it’s a bit like Apple’s terms and conditions; everyone ticks the box and nobody has a clue what they agreed to. Have you just sold your soul to a factory wherever iPhones are manufactured? Possibly.

But you’re still gonna have to do it.

The bit you sign is called the Notice of Assignment. You sign it and send it back to your bank along with your mortgage protection certificate.

The bank then sends it to the insurer and the insurer notes the bank as the legal owner of your policy.

Now, because the assignment is in effect a legal transaction, the banks don’t let us get involved so it’s up to them to send the necessary documents in a timely fashion to the insurer.

Once it’s with the insurer, we can chase it and give the insurer a bit of a prod if you’re in a rush but until then, our hands are tied.

*That’s how it usually works but each bank may do things differently.

What happens when the insurer receives the notice of assignment?

The insurer will assign your policy to the bank, so the bank becomes the owner of your policy and gets any pay-out.

Who notifies your bank that the policy has been assigned?

The insurer will send a confirmation of the assignment letter to the bank stating:

“Thank you for your recent Notice of Assignment in respect of the above-numbered policy. We have noted your interest and confirm that we hold no prior charge on this policy.”

Once the bank has confirmation of the assignment, they’re happy to issue your mortgage cheque.

How do I assign two life of another mortgage protection policies?

If you’re buying as a couple we recommend two single life policies to reduce any potential inheritance tax.

Assigning two policies works in the same way as assigning a single policy only you will have to complete a Deed of Assignment for each policy.

Is there a fee payable to assign a policy?

And just like that, you’ve assigned your policy.

Your TL;DR of tips, once more:

• Don’t buy Mortgage Protection from your lender. You likely won’t be getting the best deal and it makes it a little trickier if you want to switch your mortgage down the line.
• You can use an existing Life Insurance policy as your Mortgage Protection. However, you’re probably better off keeping them separate, as two policies = two pay-outs and an easier life for your family.
• Mortgage Protection = covers your mortgage. Life Insurance = covers you.
• If you’re bringing your own policy to the table, you’ll need to legally assign it to your bank by following the steps in this article. It’s basically you, your solicitor, your bank and insurer formally saying that the policy will pay-out your mortgage if you die.
• Before you buy any policy, make sure you go with a reputable broker so that you know you’re actually getting the best deal.

That’s all, folks!

Over to you…

I hope that clears up how to assign a mortgage life insurance policy to a bank. It’s simple, no matter how difficult your bank may try to make it seem.

But if you have any questions, please complete the short form below and I’ll be right back or even better: call me

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Deed of assignment

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• Detailed guidance notes

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• Unlimited support by email
• Review of your edited document by a lawyer

Document overview

• Length: 6 pages (1100 words)

If the document isn’t right for your circumstances for any reason, just tell us and we’ll refund you in full immediately.

We avoid legal terminology unless necessary. Plain English makes our documents easy to understand, easy to edit and more likely to be accepted.

You don’t need legal knowledge to use our documents. We explain what to edit and how in the guidance notes included at the end of the document.

Email us with questions about editing your document. Use our Lawyer Assist service if you’d like our legal team to check your document will do as you intend.

Our documents comply with the latest relevant law. Our lawyers regularly review how new law affects each document in our library.

About this deed of assignment for a life insurance policy

Use this deed of assignment to transfer a life insurance policy to another person. The reason for transfer could be any, but it is a sale in that money changes hands.

The document includes reasonable warranties by the seller and undertakings by the buyer. It is clear and simple, but thorough and complete for an arm’s length transaction.

The transfer will be complete and valid only when the insurer has been formally notified. As well as the deed document, we have included a template notice that the assignment has taken place. This may or may not be useful to you: your insurer may prefer you to use their own form, but sometimes other parties, like your bank, also need to know or appreciate being told.

• We offer a simpler version of this document if you are a trustee assigning the policy to a beneficiary, use: Deed of assignment: life or endowment policy by trustees
• If you are making or receiving a transfer as part of a divorce or separation, use:  Deed of assignment: life or endowment policy on divorce .

Every document is straightforward to complete and written in plain English.

Completing this deed of assignment

For technical legal reasons, all assignments of life policies must be by deed and not by contract. The main practical difference is that a deed requires a witness to the signatures. Unless it is more convenient to do otherwise, the same witness can verify the signatures of both parties.

Taxation of life assurance policies is complex and we recommend that you consult with a tax accountant. The effect of tax is also an important consideration in assessing the value to the assignee of the policy.

When to use this deed of assignment

The deed can be used to assign a policy:.

• from one individual to another, for payment or as a gift;
• In a sale by the life assured to anyone or any company.

Document features and contents

The deed of assignment includes the following paragraphs:.

• Warranties by the assignor;
• The assignment;
• Dispute resolution;
• Severance and invalidity;
• Form: Notice of Assignment to deliver to the insurer and bank.

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• reporting on whether your changes comply with the law
• answering your questions about how to word a new clause or achieve an outcome
• checking that your use of defined terms is correct and consistent
• correcting spelling mistakes
• reformatting the document ready to sign

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Assign policy to new owner

An absolute Assignment is a transfer of ownership from the Assured (Assignor) to another person or institution (Assignee). The Assignee becomes the new owner of the policy and assumes full legal rights over the policy. All proceeds, including surrender, maturity and claims, will be payable to the Assignee.

You can assign the policy if

1. the policy

- is not using CPF/SRS monies for premium payments

- is not effected under trust

- is not used to be exempted from CPF Board's Home Protection Scheme (HPS)

- is allowed to be assigned under the plan

2. both Assignor and Assignee are

- of sound mind

- not bankrupt

- not under duress

3. The Assignor must be at least 18 years old. For policies issued on or after 1 March 2009, the Assignee must be at least 18 years old. For policies issued before 1 March 2009, the Assignee must be at least 21 years old.

Both the Assignor and Assignee must come to our Customer Service Centre at 1 Pickering Street, #01-01 Great Eastern Centre, with their NRIC.

If the assignment is done between spouses, or parent and child, or siblings, and relationship can be established by producing the marriage certificate or birth certificate, they need not be present at our Customer Service Centre.

Please complete the Absolute/Collateral Assignment form. Additional documents required are stated on the overleaf of the form.

Yes, you can assign to a company or institution.

Both the Assignor and Assignee must come to our Customer Service Centre at 1 Pickering Street, #01-01 Great Eastern Centre, with their NRIC (if the relationship between them is buyer and seller).

For an assignment to a company or institution, a company stamp is required on the assignment form.

No. Once absolutely assigned, the policy ownership will belong to the Assignee. However, the policy ownership can be transferred back to you provided the Assignee agrees to it. A new assignment will need to be done.

You can still assign the policy if the nomination made is a revocable nomination. The revocable nomination will be automatically revoked once the policy is assigned. If the policy has a trust nomination, the trust nomination will have to be revoked before you make an assignment.

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ASSIGNMENT OF TITLE INSURANCE POLICY

The ALTA Owner Policy definition of insured extends to certain people beyond the named person or entity on Schedule A. It also includes "those who succeed to the interest of the named insured by operation of law as distinguished from purchase including, but not limited to, heirs, distributees, devisees, survivors, personal representatives, next of kin, or corporate or fiduciary successors." This means that anyone who takes title from the insured by a conveyance is not an insured and cannot make a claim under the policy.

For the most part, those who take title by conveyance are third parties, usually buyers in a buy/sell transaction. However, sometimes the insured will convey the property to his or her own trust, a family partnership, or some other entity that the insured controls. In this case, the new entity in title is not an insured.

On the other hand, the new entity will not really benefit from a new policy because the Policy Exclusions 3a and 3e, for matters created, suffered, or assumed by the insured and for consequences of the failure to pay value for the property, will diminish coverage.

To provide some coverage to the new entity, it is prudent to obtain an Assignment of Title Insurance Policy. In the past, assignments of title policies were entirely handled by ATG staff. Now, ATG has new procedures that allow members a choice of two ways to provide this coverage to insureds. Members can earn a fee for issuing these endorsements and provide excellent legal advice to clients about how to ensure appropriate title coverage for their estate planning transfers.

ATG has a new endorsement that allows an estate planning vehicle to be an insured under an ATG Owner Policy, despite the fact that the estate planning vehicle takes title by conveyance.

The endorsement is the Assignment of Title Insurance Policy Endorsement (ATG Form 2089), which carries a special risk premium to ATG of $200. For insureds in the process of conveying their property to an estate planning vehicle, this endorsement may be issued at the time of the conveyance to ensure that the coverage under an original ATG Owner Policy will continue for the benefit of the estate planning vehicle.

This endorsement does not extend the Date of Policy, does not add insurance for defects, liens, or encumbrances after the Date of Policy, and does not insure the validity of the conveyance or of the estate planning vehicle.

To issue this endorsement, take the following steps:

1.      Obtain a copy of the recorded deed to the estate planning vehicle and a copy of the ATG Owner’s Policy.

2.      Review the deed to be sure it conveys the same property as is covered by the Owner’s Policy, and to determine whether all the Insureds on the Owner’s Policy conveyed their interests to the estate planning vehicle. (If not, please contact the Underwriting Department for instruction).

3.      Complete the endorsement to show the names of the grantors who are assigning the Owner’s Policy, as shown on the Owner’s Policy, and the names of the assignees, as shown on the deed.

4.      Have the assignors sign the endorsement.

The assignees should attach the endorsement to the original title policy once it is complete. Remit copies of the endorsement and Owner’s Policy, together with ATG’s premium, to the Policy Records Department in Champaign.

Questions? Contact an Underwriter . 

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