Missing Assignment of Policy document

F

Flash

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Hi All,
New to the website so hope I have posted in the correct forum. I received a letter from my mortgage provider asking me to fill in and return an Assignment of Policy form. Apparently this was not filled out when I took out my mortgage with them in 2007. Does anyone know what the relevance of this document is? any help appreciated.
 
Flash said:
Does anyone know what the relevance of this document is? any help appreciated.
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It assigns your life insurance to the lender. Basically, the bank becomes the owner of the policy so if you die the proceeds of the policy will be paid to the bank to clear the mortgage.
 
Presumably this relates to assignment of the mortgage protection life insurance policy to the lender?
 
NorfBank said:
It assigns your life insurance to the lender. Basically, the bank becomes the owner of the policy so if you die the proceeds of the policy will be paid to the bank to clear the mortgage.
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I read a similar kind of condition in a lease/purchase contract once.
I as the purchaser was to ensure the laptop yet assign the policy to the company I was leasing the laptop from.
I got a legal opinion on this following my own investigation of the ins and outs of it and my advisor said "no way".
Basically, he said that "you are the policyholder, you pay for the policy and the proceeds come to you or your family, not some third party".

I'd be interested to hear views on this in conjunction with responding to the OP's question.
 
onq said:
Basically, he said that "you are the policyholder, you pay for the policy and the proceeds come to you or your family, not some third party".
QUOTE]

Unless you assign/give ownership of the policy to a third party.

You do not have to assign the policy but if you don't the bank will not allow you to drawdown the mortgage.

As the OP has already drawndown the mortgage, he does not have to assign the life policy but as always check terms and conditions. I know one lender has a condition that they will take out of a policy on your behalf and add the premiums to your mortgage repayments.
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They are free to offer, but not impose I would have thought, especially where there is an existing policy that may not have been assigned.
Risk reduction is one thing, but this is going a step too far - I would recommend scrutinizing any policy that is tied to a mortgage provider.
 
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