Nature of Assigning a Life Policy 人壽保單轉讓的性質
Assignment means that the policyholder (the assignor) transfers rights under the policy, such as the right to receive policy benefits, surrender the policy or take a policy loan, to another party (the assignee). A life policy is a valuable property right, so it can be given away, sold or used as security for a loan.
Unless the policy terms restrict it, a life policy can generally be assigned freely without the insurer's prior consent. Property insurance is different: assignment normally needs the insurer's prior consent because the insurer's acceptance depends on the particular insured. In life insurance the risk depends on the life insured, and that does not change when the policy changes hands.
Insurable interest is required only at inception, so the assignee does not need an insurable interest in the life insured. Assignment also does not change the life insured: the policy continues to cover the same person's life.
Absolute and Collateral Assignment 絕對轉讓與抵押轉讓
Absolute assignment permanently transfers all rights in the policy to the assignee, either as a gift or for value. The assignee becomes the new policyholder and can surrender the policy, take a policy loan and exercise the other policy rights. The assignor no longer has these rights and cannot unilaterally take the policy back.
Collateral assignment (also called conditional assignment) uses the policy as security for a debt, commonly a bank loan. The assignee's interest is limited to the amount still owed: if the life insured dies before repayment, the assignee takes the outstanding amount from the policy proceeds and the balance goes to the beneficiary or other person entitled under the policy.
Once the debt is repaid, the assignee's interest ends and the rights return to the policyholder. In practice a reassignment is usually completed and notified to the insurer so that the records are clear.
Formalities, Notice and Priority 形式、通知及優先次序
An assignment should be in writing and signed by the assignor. Under the rules on legal assignment in the Law Amendment and Reform (Consolidation) Ordinance (Cap. 23), the assignment must be absolute (not merely by way of charge), in signed writing and followed by express written notice to the insurer before the assignee can claim directly from the insurer in the assignee's own name. An assignment that misses these requirements may still be valid in equity, but the assignee generally has to join the assignor in any legal action.
The insurer is not bound by an assignment until it receives written notice. If an insurer unaware of the assignment has already paid the original policyholder or beneficiary according to its records, it is generally discharged, so the assignee should give notice promptly. An insurer's acknowledgement of a notice only records it and does not guarantee that the assignment is valid.
If a policy is assigned to more than one assignee in succession, priority generally follows the order in which the insurer received notice, not the order of the assignments. However, a later assignee who already knew of the earlier assignment when acquiring the interest cannot gain priority by giving notice first.
Limits on the Assignee's Rights and Effect on Beneficiaries 受讓人權利的限制及對受益人的影響
An assignee acquires no better rights than the assignor had. The insurer can raise against the assignee any defence it could have raised against the assignor, for example that the policy is voidable for non-disclosure of a material fact. Any outstanding policy loan and interest can also be deducted from the amount payable.
Assignment does not by itself keep a policy in force. If premiums are not paid, the policy may still lapse or be dealt with under the nonforfeiture provisions, so an assignee holding the policy as security will usually require premiums to be paid on time.
A beneficiary is not the same as an assignee. A revocable beneficiary has only an expectation until the death of the life insured, so the policyholder can generally assign without that beneficiary's consent, and the assignee's interest ranks ahead to that extent. An irrevocable beneficiary has a vested right, so an assignment generally needs that beneficiary's consent. Where a policy is held on trust for a spouse or children, the policyholder likewise cannot deal with it freely.
Practice
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