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Tuesday, 21 April 2026
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Life policies can be used as a collateral for loan when the policy has?

Life policies can be used as a collateral for loan when the policy has?
Take Free Practice Test On 2026 JAMB UTME, Post UTME, WAEC SSCE, GCE, NECO SSCE
  • A Ceased to be life
  • B Been temporary suspended
  • C Acquired surrender value
  • D Been made paid-up
Correct Answer: Option C
Explanation:
A collateral assignment of life insurance is a conditional assignment appointing a lender as the primary beneficiary of a death benefit to use as collateral for a loan. If the borrower is unable to pay, the lender can cash in the life insurance policy and recover what is owed.
'Surrender Value': It is the amount the policyholder will get from the life insurance company if he decides to exit the policy before maturity.

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