Irrevocable Assignment of Life Insurance can refer to irrevocable assignment of ownership and/or benefits.
If you assign ownership of your policy irrevocably to another party, you can no longer make any changes to the policy. This type of assignment is often used for tax purposes, by assigning ownership of the policy to an Irrevocable Life Insurance Trust (ILIT).
If you assign benefits of your policy to another party irrevocably, they will receive the payment when you pass. This type of assignment is often used to designate life insurance to be used for funeral expenses under Medicaid spend down guidelines.
Business Development Officer, T.D. McNeil Insurance Services, Fresno, California
An assignment means that you forfeit your rights, at least temporarily, to property. In this case you are talking about an insurance policy. The person to whom the rights have been assigned can change the provisions of the policy, and access the values of the policy. This is an effective way to move life insurance completely out of your estate.
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If you assign ownership of your policy irrevocably to another party, you can no longer make any changes to the policy. This type of assignment is often used for tax purposes, by assigning ownership of the policy to an Irrevocable Life Insurance Trust (ILIT).
If you assign benefits of your policy to another party irrevocably, they will receive the payment when you pass. This type of assignment is often used to designate life insurance to be used for funeral expenses under Medicaid spend down guidelines.