answer is A. The assignee should reassign the policy to the loanee.Collateral assignment will not terminate when the loan is paid off.The event upon which the bank would have invoked the assignment to recover the outstanding loan has ceased( the policy holder has paid the loan back), hence the polciy has to be reassigned to the loanee, otherwise the bank will be the claimant incase of the death of the loanee, even after the loan is repaid.

C.

You have to work these questions by eliminating the most wrong answers first - then the one left, is the RIGHT answer. But you won’t pass your test, until & unless you know WHY the wrong answers are wrong.

It’s not C. The insurance company is not looking at the return address on the envelope. They’re looking at the form to see that it’s properly filled out and notarized. The BANK does not even sign the form. They ONLY sign it upon the release…not the assignment. See the form I linked.

It’s A. The key word is “automatically.” The insurance company will have no idea the loan is repaid until a release is signed notfying them.

It’s just like your car title. The lein is put on there but it’s not “automatically” removed when the car is paid off. The loan company has to notify the state first.

This form is for an annuity, but same difference….

Jeff

PS Trust me…because look at the form I lnked. They (the other 3 answers) all missed the key word “automatically” in “A.” It will terminate ONLY once the bank signs the release. Again, just look at the form I provided in the link. THE BANK DOES NOT SIGN IT FOLKS!!! B, C AND D are right….A is wrong.

This is fun give me another.

C. Lois will sign the collateral assignment form, and the bank will forward it to the insurance co.

C. because the bank will send it to the insurance company.