ASSIGNMENT OF LIFE INSURANCE POLICY AS COLLATERAL
A. For Value Received the undersigned hereby assigns, transfers, and sets over as interest may appear to:
Name of Lender
Address of Lender
City State Zip
its successors and assigns, (herein called the “Assignee”) Policy No. ___________________ issued by North American Company (herein called the
“Insurer”) and any supplementary contracts issued in connection therewith (said policy and contracts being herein called the “policy”), upon the life of
_________________________________________________ and all claims, options, privileges, rights, title and interest therein and thereunder (except as
provided in Paragraph C below), subject to all the terms and conditions of the policy and to all superior liens, if any, which the Insurer may have against the policy.
The undersigned jointly and severally agree to the conditions and provisions herein set forth.
B. Without detracting from the generality of the foregoing, the following specific rights are included in this assignment and pass by virtue hereof to the Assignee:
1. The sole right to collect from the Insurer the net proceeds of the policy when it becomes a claim by death or maturity;
2. The sole right to surrender the policy and receive the surrender value thereof at any time provided by the terms of the policy and at such other times as the
Insurer may allow;
3. The sole right to obtain one or more loans or advances on the policy, either from the Insurer or, at any time, from other persons, and to pledge or assign the
policy as security for such loans or advances;
4. The sole right to collect and receive all distributions or shares of surplus, dividend deposits or additions to the policy now or hereafter made or apportioned
thereto, and to exercise any and all options contained in the policy with respect thereto; provided, that unless and until the Assignee shall notify the Insurer in
writing to the contrary, the distributions or shares of surplus, dividend deposits and additions shall continue on the plan in force at the time of this assignment;
and
5. The sole right to exercise all nonforfeiture rights permitted by the terms of the policy or allowed by the Insurer and to receive all benefits and advantages
derived therefrom.
C. The following specific rights, so long as the policy has not been surrendered, are reserved and excluded from this assignment and do not pass by virtue hereof
to the Assignee:
1. The right to collect from the Insurer any disability benefit payable in cash that does not reduce the amount of insurance;
2. The right to designate and change the beneficiary;
3. The right to elect any optional mode of settlement permitted by the policy or allowed by the Insurer; but the reservation of these rights shall in no way impair
the right of the Assignee to surrender the policy completely with all its incidents or impair any other right of the Assignee hereunder, and any designation or
change of beneficiary or election of a mode of settlement shall be made subject to this assignment and to the rights of the Assignee hereunder.
D. This assignment is made and the policy is to be held as collateral security for any and all liabilities of the undersigned, or any of them, to the Assignee, either
now existing or that may hereafter arise in the ordinary course of business between any of the undersigned and the Assignee (all of which liabilities secured or
to become secured are herein called “Liabilities”).
E. The Assignee covenants and agrees with the undersigned as follows:
1. That any balance of sums received hereunder from the Insurer remaining after payment of the then existing Liabilities, matured or unmatured, shall be paid
by the Assignee to the persons entitled thereto under the terms of the policy had this assignment not been executed;
2. That the Assignee will not exercise either the right to surrender the policy or (except for the purpose of paying premiums) the right to obtain policy loans from
the Insurer, until there has been default in any of the Liabilities a failure to pay any premium when due, or until proper notice of intention to exercise such
right as been given.
3. That the Assignee will upon request forward without unreasonable delay to the Insurer the policy for endorsement of any designation or change of beneficiary
or any election of an optional mode of settlement.
F. The Insurer is hereby authorized to recognize the Assignee’s claims to rights hereunder without investigating the reason for any action taken by the Assignee,
or the validity or the amount of the Liabilities or the existence of any default therein, or the giving of any notice under Paragraph E(2) above or otherwise, or the
application to be made by the Assignee of any amounts to be paid to the Assignee. The sole signature of the Assignee shall be sufficient for the exercise of any
rights under the policy assigned hereby and the sole receipt of the Assignee for any sums received shall be a full discharge and release therefore to the Insurer.
Checks for all or any part of the sums payable under the policy and assigned herein, shall be drawn to the exclusive order of the Assignee if, when, and in such
amounts as may be, requested by the Assignee.
G. The Assignee shall be under no obligation to pay any premium, or the principal of or interest on any loans or advances on the policy whether or not obtained by
the Assignee, or any other charges on the policy, but any such amounts so paid by the Assignee from its own funds, shall become a part of the Liabilities hereby
secured, shall be due immediately, and shall draw interest at a rate fixed by the Assignee from time to time.
H. The exercise of any right, option, privilege or power given herein to the Assignee shall be at the option of the Assignee, but (except as restricted by paragraph E
(2) above) the Assignee may exercise any such right, option, privilege or power without notice to, or assent by, or affecting the liability of, or releasing any interest
hereby assigned by the undersigned, or any of them.
I. The Assignee may take or release other security, may release any party primarily or secondarily liable for any of the Liabilities, may grant extensions, renewals or
indulgences with respect to the Liabilities, or may apply to the Liabilities in such order as the Assignee shall determine, the proceeds of the policy hereby assigned
or any amount received on account of the policy by the exercise of any right permitted under this assignment, without resorting or regard to other security.
J. In the event of any conflict between the provisions of this assignment and provisions of the note or other evidence of any Liability, with respect to the policy or
rights of collateral security therein, the provisions of this assignment shall prevail.
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North American Company • Administrative Office: P. O. Box 5088, Sioux Falls, SD 57117 • Principal Office: West Des Moines, IA
Phone: (877) 872-0757 Fax: (877) 208-6136 • www.NorthAmericanCompany.com
