Can you sell or otherwise assign a guaranteed income stream?

I know someone who has a Defence Forces pension in addition to his current PAYE income. Obviously the pension is State guaranteed and will continue for his lifetime, with indexation.

He's looking to raise a lump sum using only the DF pension as security. Can he assign it to a third party in return for a lump sum? Normal bank borrowing is not an option in this particular case.

My first thought would be what happens if he dies a year into drawing down the pension - would the value of his estate be enough to repay the outstanding lump sum?

The individual is in his 40s and in good health so life assurance cover could be arranged.