If a person intends to take a loan can assign the policy in favor of a bank as collateral. If the assignment is made to a third person then pro note should be submitted as a supporting document,else not needed.
Assignment can be made by way of making endorsement in the policy document by the Life Insurance company or it can be done by way of registration of deed. But the first option is cheaper.
Assignment is classified in to two. One is Absolute Assignment and another is Conditional Assignment. If a person want to transfer the right without any conditions, then he can go for Absolute assignment. If it is made with conditions like, assignment will come in to closure if loan is repaid, then one can go for conditional assignment.
Both can be revoked, but conditional assignment can be done only after getting consent letter from the Assigner.
Assignment will overlook any Nominations made.