A. ceased to be life
B. been temporarily suspended
C. acquired a surrender value
D. has 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.
