In the normal course of events, once a policy is issued, the policyholder will continue to pay the premiums until a claim arises, and very little else will happen concerning the policy.

However; a life assurance policy is a valuable document and it is very acceptable as security for a loan from a bank or building society. Many policies are used in this way to secure mortgages on property. In such cases the lender (the building society or bank) will advise the insurance company which issued the policy that they have taken the policy as security for a loans or mortgage. They will then request that, in the event of a claim, they are advised for the benefits under the policy are paid. The policyholder will pass the policy to the lender in a transaction known as an 'assignment of policy'. The insurance company will acknowledge the advice of the assignment but will also state that they express no opinion on the validity of the lender's claim to the policy proceeds.

When a claim is due to be paid the policyholder would be advised that, according to the insurance company's records, another party has indicated that the policy has been assigned to them. When the person holding the documents including the policy presents them to the insurance company, the claim will be paid to that person. If the policy proceeds are greater than the original loan or mortgage then this person must forward the balance of the proceeds to the policyholder.

In recent years there has been a growth in the sale of life policies. This is an alternative to surrendering the policy. In this arrangement, the policy is assigned to the new owner who continues to pay the premiums until maturity, when he hopes his return will be attractive.