What does Collateral Assignment mean? Read on to discover the definition & meaning of the term Collateral Assignment - to help you better understand the language used in insurance policies.
The assignment of a policy to a creditor as security for a debt. Under a collateral assignment, the creditor is entitled to be reimbursed out of policy proceeds for the amount owed. The beneficiary is entitled to any excess of policy proceeds over the amount due the creditor in the event of the insured's death.
We hope the you have a better understanding of the meaning of Collateral Assignment.