What is a collateral assignment? Collateral assignment is the contractual designation of a company or other entity as the beneficiary of a life insurance policy.
Life insurance policies allows you to designate beneficiaries who will receive benefits upon your death. Those beneficiaries can be changed at any time without any notification to the beneficiary that the policy has been changed. A collateral assignment takes precedence over the beneficiary and the assigned has to release it themselves, and the owner and payor cannot change it on their own. Creating the collateral assignment is not as simple as just assigning the bank to be the beneficiary upon death. You will need to work with your insurance agent as well as the insurance carrier to ensure the request has been properly attached to the policy.
Collateral assignments BENEFIT the policy owner because it will make sure that the loan is paid off to the SBA and remaining benefits distributed to your designated beneficiaries. In the end, it protects your family and your growing business.
Let us assist you with all your SBA loan insurance needs. Our experts will help expedite the process to help you meet your deadlines to close on your loan in a timely manner.
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