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Difference between nomination and assignment

febrero 3, 2020

When we talk about life insurance, we often hear the terms being named and assigned. The first refers to the appointment of a person, to receive the proceeds from the death of the contractor, while the second implies the legal transfer of the rights to the benefits of the policy to another person, ie assignee.

In the appointment, the property or the amount guaranteed by the policy remains available to the insured, up to the moment in which he / she lives and the person appointed as the candidate only for beneficial interest. On the other hand, in the assignment the amount of the policy or activities passes to the assignee, as it obtains the title or ownership and interest of the policy. Check the article given for the differences between the appointment and the assignment.

Comparative chart

Basis for comparison Appointment assignment
SenseThe appointment implies the appointment of a person by the policyholder to receive the benefits of the policy in the event of death.Assignment, allusion, assignment of the right, title and interest of the policy to another person.
attestationThe certificate not required in the appointment.The assignment required in the assignment.
considerationIt does not imply consideration.It can involve consideration.
Right to sueThe holder has no right to sue according to the policy.The assignee has the right to sue.
PurposeHelp the beneficiary to recover the amount of the policy when it becomes due.To transfer all rights and interests to the assignee.
withdrawalIt can be changed or revoked several times.It can be revoked once or twice during the policy period.
FavorGenerally, done in favor of close relatives.It can be done in favor of close relatives or outside parties.

Definition of appointment

In life insurance, the appointment can be understood as a structure that allows the insured or insured to appoint a person, who can request the amount of the policy, in the event of the death of the insured. If, in the event, a minor nominated as a candidate, then a major should be specified, in order to receive the money guaranteed by the policy, upon the death of the insured.

The policyholder may make the appointment at the time of purchase of the policy or at any time before the expiry of the term. The policyholder authorized to change the appointment, during the term of the policy, by making a new appointment, which should be incorporated, either through the text in the policy or through the approval of the policy, to become effective.

When the policy matures while the insured is alive or when the candidate dies before the policy expires, the policy amount is paid to the policyholder or his heir or legal representative.

Definition of assignment

Assignment, as the name suggests, the legal transfer of rights from the contractor to the assignee to receive the benefits indicated in the insurance contract. Usually done out of love and affection with family members or due consideration for any outside party.

The assignment can be made through an approval on the policy or on a separate instrument, duly signed by the assignor or his agent. The signature must be evidenced by at least one person competent for the contract. It becomes effective from the date the documents are received by the insurance company in the correct order.

In general, the space for approval indicated in the policy document to allow the holder to affix the declaration of assignment, together with the reasons for the same.

The benefits in politics come from survival and death benefits. All life insurance policies offer benefits in the event of death, but survival benefits relate to the benefits accrued under the policy that involves a hidden investment component.

Key differences between appointment and assignment

The difference between the appointment and the assignment can be clearly expressed for the following reasons:

  1. The appointment of an individual by the insured to receive the amount guaranteed by the policy upon the death of the insured known as a nomination. On the other hand, assignment refers to assigning the right, ownership and interest in politics to another person.
  2. In the appointment, there is no obligation of attestation by the witness. Vice versa, the certification of at least one witness is required in case of assignment.
  3. In the appointment, there is no such thing as consideration. On the contrary, the task can be with or without consideration.
  4. The appointment does not give the candidate the right to sue according to the policy. On the contrary, the assignment confers on the assignee the right to sue the policy.
  5. The appointment is made to help the beneficiary recover the amount of the policy when it becomes due. On the contrary, the assignment aims to transfer all rights and interests in favor of the assignee.
  6. The appointment can be revoked or changed several times, while the assignment can be canceled only once or twice during the end of the policy.
  7. The appointment made in favor of close relatives. On the contrary, the assignment made in favor of close relatives or external parties.

Conclusion

In general, an appointment only accentuates the hands, to which the amount of the policy must be paid in the event of the death of the insured, so that the insurance company obtains the extinction of the liabilities, as per policy. However, the amount can be claimed by the insured's legal heirs.

The assignment generally carried out by the policyholder for the sake of close relatives or also for certain considerations by an external party. The assignment without consideration to an external party subject to detailed control, as it is considered a possible method of money laundering.

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