Assignment of Life Insurance Policy as Collateral

10/20/2013

1.   Assignment. For value received, _______(1)_______, of
_________(2)___________, assignor, hereby assigns, transfers,
and delivers to _________(3)___________, of
_________(4)_________, assignee, __(5)__ successors or
assigns, policy No. __(6)___, issued by ________(7)_________,
insurer, and any supplementary
contract issued in connection therewith on the life of
______(8)_________, of ________(9)__________, and all my
right, title, and interest therein except as provided in
Section 3 hereof, subject to all the terms and conditions of
the policy and to all superior liens, if any, that insurer may
have against the policy.

2.   Rights of assignee. Assignor agrees that the following
specific rights pass to assignee by virtue of this agreement:

a. The sole right to collect from insurer the net proceeds of
the policy when it becomes a claim by death or maturity;

b. The sole right to surrender the policy and receive the
surrender value thereof at any time provided by the terms of
the policy and at such other times as insurer may allow, and
the full right to obtain one or more loans or advances on the
policy from insurer, such rights subject however, to the
provisions of Section 5a hereof;

c. The sole right to collect and receive all distributions or
shares of surplus, dividend deposits, or additions to the
policy now or hereafter made or apportioned thereto, and to
exercise any and all options contained in the policy with
respect thereto; provided, that unless and until assignee
shall notify insurer in writing to the contrary, the
distributions or shares of surplus, dividend deposits, and
additions shall continue on the plan in force at the time of
this assignment; and

d. The sole right to exercise all nonforfeiture rights
permitted by the terms of the policy or allowed by insurer and
to receive all benefits and advantages derived therefrom.

3. Rights reserved by assignor. It is expressly agreed that so
long as the policy has not been surrendered, the following
specific rights are reserved and excluded from this assignment
and do not pass to assignee by virtue hereof:

a. The right to collect from insurer any disability benefit
payable in cash that does not reduce the amount of insurance;

b. The right to designate and change the beneficiary; and

c. The right to elect any optional mode of settlement
permitted by the policy or allowed by insurer.

4. Indebtedness secured. This assignment is made as collateral
security for any and all indebtedness of assignor to assignee,
either now existing or that may hereafter arise between
assignor and assignee. Assignee agrees to apply any and all
money received from insurer to the satisfaction of such
indebtedness, and to pay to assignor, his legal
representatives, heirs, or assigns, any balance remaining
after payment of the indebtedness existing at the time of such
payment.

5. Covenants of assignee. Assignee covenants that:

a. Assignee will not exercise either the right to surrender
the policy or, except for the purpose of paying premiums, the
right to obtain policy loans from insurer, until there has
been default in any of the then existing indebtedness secured
by this assignment or a failure to pay any premium when due,
or until thirty (30) days after assignee shall have mailed to
assignor, at the address last supplied in writing to assignee,
notice of intention to exercise such right, with specific
reference to this assignment; and

b. Assignee will, on request, forward without unreasonable
delay to insurer the policy for endorsement of any designation
or change of beneficiary or any election of an optional mode
of settlement.

6. Payment of charges on policy. Assignor agrees to pay, and
assignee shall be under no obligation to pay, any premium, or
the principal of or interest on any loans or advances on the
policy whether or not obtained by assignee, or any other
charges on the policy. However, any such amounts so paid by
assignee shall become a part of the indebtedness hereby
secured, shall be due immediately, and shall draw interest at
the rate of _(11)_ percent (_(12)_%) per year from date of
payment.

Dated ________(13)____________, 20_(14).

_____________(15)______________

Notice

The information in this document is designed to provide an outline that you can follow when formulating business or personal plans. Due to the variances of many local, city, county and state laws, we recommend that you seek professional legal counseling before entering into any contract or agreement.

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