Sikhar' is a school teacher drawing a salary of ₹20,000 per month. He took a policy for ₹10,00,000 and assigned the same in favour of 'Buddhadev', who paid the premium for 6 months. At this time 'Sikhar' died and 'Buddha

Assignment is the transfer of the rights to receive the benefits under a contract accruing to the party to that contract. In life insurance parlance, assignment is the transfer of rights to receive benefits stated in the life insurance policy from the Policyholder to the Assignee. The benefits under an insurance policy accrue by way of survival benefits and death benefits. While death benefits accrue in every insurance policy, survival benefits typically relate to maturity benefits under an insurance policy with an underlying investment component. The concept and procedure for Assignment is dealt with under Section 38 of the Insurance Act, 1938 . The Section treats an Assignment and a Transfer at par. It lays down that a transfer or assignment of a policy of life insurance, whether with or without consideration, may be made only by an endorsement upon the policy itself or by a separate instrument, signed in either case by the transferor or by the assignor or his duly authorised agent and attested by at least one witness, specifically setting forth the fact of transfer or assignment. The insurance policy can be assigned for reasons of 'love and affection' within the immediate family members, or for a 'valid consideration' to any external person or entity.