Collateral Borrower
Individual who assigns rights to a benefit. For example, a life insurance policy may be assigned as security for a loan made by the borrower. The policy protects the collateral creditor (assignee) if the borrower does not pay the loan when due. If a loan remains unpaid at the death of an insured, the loan balance is subtracted from the death benefit and paid to the creditor, with the balance going to the insured's beneficiary. On the other hand, if the insured (the borrower) does not pay the loan when due, the creditor can withdraw the amount due from the cash value of the policy. When a loan is repaid, the assignment ends and the policy owner is again vested with all rights to the policy.
Popular Insurance Terms
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Monetary sum paid or payable to a recipient for which the insurance company has received the premiums. ...
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Adjustment of the burning cost ratio for the increase in number and size of losses (losses likely in excess of that used in the unadjusted burning cost rate), incurred but not reported ...
Insurance coverage purchased on the same item from two or more insurance companies. ...
Same as term Civil damages Awarded: sums payable to the winning plaintiff by the losing defendant in a court of law; can take any or all of these forms: general, punitive, and special. ...
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