Specimen Deed of Assignment of Life Insurance Policy — Format 2026

Specimen Deed of Assignment explained: this guide covers what Specimen Deed of Assignment means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.

Assignment of Life Insurance — Section 38

Under Section 38 of the Insurance Act, 1938: a life insurance policy may be assigned by endorsement on the policy or by a separate instrument signed by the assignor. The assignment transfers the right to receive the policy proceeds from the assignor (policyholder) to the assignee (new beneficiary). Common uses: (a) collateral for loans (bank requires policy assignment as security), (b) gift to family member, (c) transfer in business transactions, (d) tax planning.

Types of Assignment

(a) Absolute Assignment: Complete transfer of ALL rights — the assignee becomes the new owner of the policy with full rights to surrender, claim maturity/death benefit, and further assign. (b) Conditional Assignment: Transfer subject to a CONDITION — typically: "this assignment shall stand revoked if the loan is repaid in full." Used when the policy is assigned as loan collateral — the assignment reverts to the assignor on loan repayment.

Specimen Deed of Assignment

DEED OF ASSIGNMENT OF LIFE INSURANCE POLICY

This Deed is made on by:

(the "Assignor") in favor of (the "Assignee")

1. The Assignor is the holder of Life Insurance Policy No. issued by on , with sum assured of Rs. on the life of the Assignor.

2. In consideration of advanced as loan / ]: the Assignor hereby ABSOLUTELY assigns the above policy to the Assignee — transferring ALL rights, title, benefits, and interest in the policy.

3. The Assignee shall hereafter be entitled to: (a) receive all benefits (maturity, death, bonus, surrender value), (b) exercise all rights (nomination change, loan against policy, surrender), (c) further assign or transfer.

4. Notice of this assignment shall be given to as required under Section 38.

Assignor: | Assignee: | Witness:

Notice to Insurance Company

Under Section 38(2): the assignment is NOT binding on the insurance company until NOTICE of assignment is delivered to the insurer. Until notice: the insurer can pay the original policyholder (and is discharged). Procedure: (a) submit the assignment deed (or endorsed policy) to the insurance company, (b) the insurance company records the assignment — enters the assignee's name as the current holder. Most insurance companies have a prescribed form for recording assignment.

IRDAI Guidelines

IRDAI (Insurance Regulatory and Development Authority of India) guidelines: (a) assignment can be by endorsement ON the policy or by separate deed, (b) the insurer must register the assignment within 30 days of notice, (c) for policies with nomination: the assignment OVERRIDES the nomination — the assignee's right prevails over the nominee, (d) for ULIP/investment-linked policies: assignment follows the same procedure. (e) The insurer may refuse to register if: the assignment appears fraudulent, the policy terms prohibit assignment, or the assignment is not properly executed.

Tax Implications

(a) Absolute assignment (gift): Under Section 56(2)(x) IT Act: if the assignment is without adequate consideration and the premium paid exceeds Rs. 50,000: the excess may be taxable as income in the assignee's hands (for non-relatives). For RELATIVES (spouse, children, siblings): gift exemption applies. (b) Conditional assignment (loan security): Not a transfer for tax purposes — no tax consequences until the condition triggers full transfer. (c) Maturity proceeds: Section 10(10D) exemption applies if the annual premium does not exceed 10% of sum assured (for policies issued after April 1, 2012).