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There are 2 types of assignments in life insurance.
Absolute Assignment - This means that you give up all of your rights to a life insurance policy forever. An absolute assignment may be used if you are selling your life insurance policy, or during a divorce where you give up all rights to your policy.
Collateral Assignment - A collateral assignment is when you give up your rights to a policy until you have satisfied your collateral requirements. A loan is a classic example where a bank may require that you get a life insurance policy with a collateral assignment. If you still owe the bank money when you die, the bank would be repaid its money and any leftover would be paid to your beneficiaries.
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