Assignment is a transfer of specified rights under an insurance policy to another person or entity, subject to the contract and applicable law. It may be used as security for a loan or for another permitted transfer. It can affect who controls the policy or receives proceeds, unlike a simple nominee update.
A Nepalese borrower assigning life insurance to a lender should understand which rights are transferred and how outstanding debt affects the death benefit. Notify and document the arrangement through the insurer's procedure. Ask how the assignment is released after repayment and how it interacts with existing beneficiary or nominee arrangements.