assignment of life policies

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Transfer of the legal right under a life-assurance policy to collect the proceeds. Assignment is only valid if the life insurer is advised and agrees; life assurance is the only form of insurance in which the assignee need not possess an insurable interest. In recent years policy auctions have become a popular alternative to surrendering endowment assurances. In these auctions, a policy is sold to the highest bidder and then assigned to him or her by the original policyholder.

Subjects: Financial Institutions and Services — Accounting.

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