Conditional Assignment


Conditional assignment refers to transferring rights of the life insurance policy by the life insurance owner to someone else under some terms and conditions.

The policyholder is the assignor, and the person to whom the policy is assigned is called the assignee.


Conditional assignment in life insurance is the transfer of ownership of the policy subject to terms and conditions. The policy is transferred back to the assignor only if the conditions are fulfilled.

Conditional assignment can be completed using a form that must contain the information about the assignor, assignee, reason for assignment, percentage of sum assured assigned, and the person who will pay the future premiums.

Under the conditional assignment, both the assignor and assignee must provide a declaration to the insurance company. The assignor must declare that the transfer/assignment is made on his own free will.


Pranav assigned his life insurance policy to the ABC bank from which he had applied for a loan. Once Pranav pays all the loan EMIs, ABC bank will transfer the policy rights back to Pranav. But if Pranav dies or fails to pay the loan instalments, the bank will surrender the policy to get their money back. This is a perfect example of conditional assignment.