What Does It Mean When A Life Insurance Policy Is Assigned? 
Life insurance policies are often assigned for loan protection or to fund funerals , among other things . Collateral assignment still gives you some control in your policy , but allows a lender to repay your loan from your life insurance proceeds if you should pass away before the loan is paid off . Whatever does not go to your loan repayment , goes to the beneficiary of your choice . For funerals , the assignment may also collateral assignment , but if prepaying a funeral for Medicaid spend down , it must be irrevocable . 