In terms of Collateral assignment, what is the primary role of the assignee?

The primary role of the assignee in a collateral assignment is to secure a loan against the policy. In a collateral assignment, a policyholder assigns a portion of their life insurance policy’s benefits to a lender as collateral for a loan. This arrangement allows the lender to have a claim against the policy’s death benefit if the borrower defaults on the loan.

In this context, the assignee does not gain full ownership of the policy or become the primary beneficiary but is granted rights to the specified collateral that has been assigned. The assignment typically remains in effect until the debt is repaid, at which point the rights to the policy return to the original owner. This allows the policyholder access to funding while ensuring that the lender has security for the loan.