{"id":1194,"date":"2017-03-28T12:07:05","date_gmt":"2017-03-28T10:07:05","guid":{"rendered":"https:\/\/www.namfisa.com.na\/educates\/?p=1194"},"modified":"2025-07-18T15:22:05","modified_gmt":"2025-07-18T13:22:05","slug":"effects-of-cedinggiving-up-insuranceinvestment-policies","status":"publish","type":"post","link":"https:\/\/www.namfisa.com.na\/educates\/effects-of-cedinggiving-up-insuranceinvestment-policies\/","title":{"rendered":"Effects of ceding\/giving up insurance\/investment policies"},"content":{"rendered":"\t\t
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What is ceding\/giving up an insurance policy?<\/h3><\/span><\/div>
Ceding\/giving up an insurance policy means that an insured\nperson transfers his or her insurance right or benefit in a\nparticular policy to another person as security for something\nthey wish to get.\nFor example: If Corrie, the insured person has a life policy at\na company called Bravo Insurance Pty Ltd and she want to get a\nloan from a bank called Clever Bank Pty Ltd, she can give up her\nbenefit in the life cover to the bank in return for getting a loan.\nThe life cover will be the security for the bank in case Corrie does\nnot pay back the loan.\nThis also means that the bank will now have the first rights\nto the benefits from Corrie\u2019s policy. This is because Corrie, the\nconsumer has given her rights and benefits in the policy to the\nbank. But it is important to note that Corrie will be responsible\nfor paying the premiums on the policy.\n\n\n<\/div><\/div>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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Why must Corrie pay the premiums when the rights and benefits are given up to the bank?<\/h3><\/span><\/div>
That is because Corrie will still be the policy holder. That\nmeans that although the rights and benefits are given up to the\nbank, all the responsibilities relating to the policy still remain\nwith her.\n<\/div><\/div>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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Does that mean Corrie loses her benefit in the insurance policy?<\/h3><\/div>
It depends on whether Corrie has paid back the loan to the\nbank or not.\nIt also depends on the value of the policy benefit. Let us\nconsider the following facts and see what happens under two\ndifferent examples.\nCorrie, who is the consumer, gets a loan from the bank and as\na result she must pay back to the bank a total amount of N$ 120\n000. She has a life cover for the amount of N$ 150 000 with the\ninsurance company.\n\n\n<\/div><\/div>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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Example 1<\/h3><\/span><\/div>
If Corrie, pays the whole amount of 120 000 back to the bank,\nthen the bank will not be entitled to receive any benefit from her\ninsurance benefits. Therefore when she has paid off the loan at\nthe bank the cession will also be cancelled. When the cession is\ncancelled it means Corrie will be entitled to the benefits on the\npolicy and not the bank. In this case Corrie did not loses any\nbenefit to the bank.\n<\/div><\/div>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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Example 2<\/h3><\/span><\/div>
If Corrie, pays only the amount of 100 000 to the bank, then\nthe bank will be entitled to receive the rest of the amount from\nthe insurer when the policy matures. In this case Corrie loses\nsome of the benefit.<\/div><\/div>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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If the bank is entitled to benefits from the policy when will they be paid?<\/h3><\/span><\/div>
This depends on what the policy states in terms of payment.\nFor example if the policy states that the policy will only be paid\nout when the policy holder dies, then the bank will receive its\nbenefit then.\nIf the life policy states that the benefit will only be paid after\na fixed period has ended, for example when 10 years end, then\npayment to the bank will only be made after the 10 years.\n<\/div><\/div>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"

What is ceding\/giving up an insurance policy? Ceding\/giving up an insurance policy means that an insured person transfers his or her insurance right or benefit in a particular policy to<\/p>\n","protected":false},"author":1,"featured_media":1195,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_eb_attr":"","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_EventAllDay":false,"_EventTimezone":"","_EventStartDate":"","_EventEndDate":"","_EventStartDateUTC":"","_EventEndDateUTC":"","_EventShowMap":false,"_EventShowMapLink":false,"_EventURL":"","_EventCost":"","_EventCostDescription":"","_EventCurrencySymbol":"","_EventCurrencyCode":"","_EventCurrencyPosition":"","_EventDateTimeSeparator":"","_EventTimeRangeSeparator":"","_EventOrganizerID":[],"_EventVenueID":[],"_OrganizerEmail":"","_OrganizerPhone":"","_OrganizerWebsite":"","_VenueAddress":"","_VenueCity":"","_VenueCountry":"","_VenueProvince":"","_VenueState":"","_VenueZip":"","_VenuePhone":"","_VenueURL":"","_VenueStateProvince":"","_VenueLat":"","_VenueLng":"","_VenueShowMap":false,"_VenueShowMapLink":false,"footnotes":""},"categories":[428],"tags":[],"class_list":["post-1194","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-long-term-insuarence"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.namfisa.com.na\/educates\/wp-json\/wp\/v2\/posts\/1194","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.namfisa.com.na\/educates\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.namfisa.com.na\/educates\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.namfisa.com.na\/educates\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.namfisa.com.na\/educates\/wp-json\/wp\/v2\/comments?post=1194"}],"version-history":[{"count":6,"href":"https:\/\/www.namfisa.com.na\/educates\/wp-json\/wp\/v2\/posts\/1194\/revisions"}],"predecessor-version":[{"id":35647,"href":"https:\/\/www.namfisa.com.na\/educates\/wp-json\/wp\/v2\/posts\/1194\/revisions\/35647"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.namfisa.com.na\/educates\/wp-json\/wp\/v2\/media\/1195"}],"wp:attachment":[{"href":"https:\/\/www.namfisa.com.na\/educates\/wp-json\/wp\/v2\/media?parent=1194"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.namfisa.com.na\/educates\/wp-json\/wp\/v2\/categories?post=1194"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.namfisa.com.na\/educates\/wp-json\/wp\/v2\/tags?post=1194"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}