What Is Assignment of Benefits? Definition

Why it matters

A funeral home may ask for an assignment so it can be paid from the death benefit. This can simplify payment, but it also limits who gets the money. Read the form carefully, and check that the amount assigned fits the contract. A beneficiary can usually still be named for any remainder. Rules and carrier forms differ, so ask the insurer how it handles assignments before signing.

Source: law.cornell.edu

Where we use this term

How do you file a life insurance claim after a loved one dies?

Related terms

Beneficiary: A beneficiary is the person or organization the policy owner names to receive the death benefit when the insured person dies. A policy can name one or several beneficiaries and can split the payout by percentage.
Pre-Need Funeral Contract: A pre-need funeral contract is an agreement to pay for funeral goods and services in advance. The money may be held in a trust or backed by an insurance policy.
Funeral Costs: Funeral costs are the expenses for a funeral or other final arrangements, such as services, a casket or urn, a burial plot or cremation, and transport. Prices vary widely by provider and location.
Final Expense Insurance: Final expense insurance is a small whole life policy designed to pay for funeral costs, burial or cremation, and related end-of-life bills. Face amounts are modest, and it is often sold to seniors without a medical exam.
Death Benefit: A death benefit is the money a life insurance carrier pays to the beneficiary when the insured dies. It is usually paid as a lump sum and is generally income tax free to the beneficiary.

All 241 terms

Why it matters

Where we use this term

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