10 Best Life Insurance Companies for Collateral Assignment in 2025 (Top Providers Ranked)

The best life insurance companies for collateral assignment are AIG, State Farm, and Prudential because they offer lender-approved policies and dependable death benefits thanks to their robust financial histories.

Our Top 10 Picks: Best Life Insurance Companies for Collateral Assignment

At the top of the list is State Farm, which features simple assignment and inexpensive term coverage that most banks prefer. These companies provide options that meet lender requirements without forcing borrowers to give up control of their policy or reassign primary beneficiaries.

That makes them ideal choices if you’re using life insurance to secure business financing, SBA loans, or personal credit.

You can get free quotes for life insurance and secure financial protection for your loved ones by entering your ZIP code into our tool.

Collateral Assignment Life Insurance Providers With Low Monthly Rates

When comparing the best life insurance companies for collateral assignment, even small monthly rate differences can affect the cost of securing a loan backed by your policy’s death benefit. State Farm stands out with $24 a month for a term policy and $75 monthly for a whole policy, offering low-cost access to lender-approved death benefit protection.

Collateral Assignment Life Insurance Monthly Rates: Term vs. Whole Policy

Transamerica and Mutual of Omaha also offer competitive premiums while maintaining reliable death benefit structures that meet most lender requirements. On the higher end, MassMutual and Lincoln Financial offer more expensive plans, but those policies often include flexible terms, higher cash value potential, or advanced planning features for high-net-worth clients.

Providers like Prudential, AIG, Guardian, New York Life, and Northwestern Mutual fall into a mid-range pricing tier. They balance affordability with strong financial ratings and dependable death benefits—ideal for borrowers needing collateral assignment without sacrificing policy stability or long-term flexibility.

Monthly rates for term policies range from $24 to $33. State Farm offers the lowest rate, while MassMutual is the highest. New York Life and Northwestern Mutual fall around $29–$30, offering solid value. This breakdown helps you compare cost without losing lender-approved features.

Best Whole Life Insurance Rates by Age for Collateral Assignment

Whole life insurance rates for $100,000 in coverage vary by age and gender, two factors lenders consider when approving life insurance for collateral assignment. For men, Assurity and State Farm offer some of the lowest rates at age 50, though premiums rise by age 65, increasing the long-term cost of maintaining coverage.

Whole Life Insurance Monthly Rates: Male with $100k in Coverage

For women, Foresters Financial and State Farm maintain competitive, steady pricing across age groups, making them dependable picks for collateral assignment. Prudential and Liberty Mutual tend to charge more, but offer added value through stronger guarantees and higher cash value features that lenders often prefer when securing larger loan amounts.

Whole Life Insurance Monthly Rates: Female with $100k in Coverage

Since lenders assess the strength and reliability of the life insurance death benefit when accepting a policy for collateral, rate differences tied to age and gender matter. Choosing a provider with stable pricing and solid financial backing helps ensure your policy remains active and affordable for the life of the loan, protecting both your loan approval and your long-term financial security.

Discounts From the Best Life Insurance Companies for Collateral Assignment

When evaluating the best life insurance companies for collateral assignment, available discounts can significantly reduce the long-term cost of keeping your policy active—especially if you’re using it to secure a multi-year loan. Keeping premiums low without compromising death benefit reliability is essential to meet lender expectations.

Top Life Insurance Discounts

Providers like Prudential and State Farm offer discounts for good health, wellness participation, or professional group memberships—key benefits that help borrowers lower costs while maintaining lender-approved life insurance coverage.

Mutual of Omaha and Guardian provide bundling and family protection discounts, which are especially useful for business owners or families who need collateral assignment while managing multiple policies under one insurer.

AIG’s loyalty discounts and early sign-up incentives from Northwestern Mutual can also help reduce overall costs. These savings matter when you’re searching for the cheapest life insurance for collateral assignment, keeping your premiums low while maintaining a lender-approved death benefit throughout your loan term.

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How to Find Life Insurance Companies That Allow Assignment of Collateral

Not all providers are equipped to handle collateral assignments smoothly, so it’s important to know how to find the best life insurance companies for collateral assignments, especially when loan approval depends on your policy.

• Start With Whole or Universal Life Options: These policies build cash value and provide lasting coverage that most lenders prefer over short-term life.
• Look for Collateral Assignment Flexibility: Pick insurers that allow conditional assignments limiting lender rights to just the loan amount—not the full benefit.
• Contact the Insurer Directly: Call or chat to confirm if they allow assignments and how fast they process forms—some are quick, others take longer.
• Prioritize Strong Financial Ratings: Lenders prefer insurers rated A or higher by A.M. Best with a solid track record of paying claims reliably.
• Compare Quotes Based on Lender Expectations: Use quote tools, but make sure your policy meets lender needs like coverage amount, term length, or cash value.

If you’re using a policy to secure financing, it’s important to know where to buy life insurance that supports collateral assignment with minimal delays. The best providers combine strong financial ratings, assignment flexibility, and loan-friendly policy features—making them easier for both you and your lender to work with.

Why Conditional Collateral Assignment Matters

Using your life insurance as collateral is generally safe, but one common mistake could cost your family the full death benefit. Some lenders ask to be named the primary beneficiary, which gives them control over the entire payout, regardless of your loan balance.

This can happen with both term and permanent life insurance policies, especially if you’re offered lower rates without fully understanding the policy terms. For example, a $100,000 whole life policy from State Farm may start at $75 per month, but if the lender receives the full benefit instead of just the loan balance, your loved ones get nothing.

To avoid this, always request a conditional collateral assignment, where the lender receives only the outstanding loan amount, and your chosen beneficiaries receive the remainder. Most major providers—including State Farm, Prudential, and Mutual of Omaha—support this structure, and it’s a key reason they rank among the best life insurance companies for collateral assignment.

If you’re relying on the policy for financial protection, it’s also worth asking how long it takes to get life insurance proceeds, as payout delays can affect both loan closure and family support.

Real Examples of Using Life Insurance as Collateral

Collateral assignment isn’t just a technical term—it’s a practical tool people use every day to unlock funding for businesses, investments, and personal goals. Below are three real-life examples of how choosing the right life insurance provider made all the difference when borrowers needed their policies to back a loan.

• Case Study #1 — Backing a Startup Loan: When Josh, 38, launched his consulting firm, the bank required life insurance as loan collateral. He went with State Farm because they made the assignment process easy and lender-friendly. Josh secured the funds he needed, and his policy still protected his family through the built-in death benefit.
• Case Study #2 — Real Estate Financing Made Simple: Maria, an investor who was 42 at the time, landed on the right property but needed to get fast approval for a commercial loan. She financed it with her Prudential whole life insurance contract. The death benefit satisfied the lender’s needs and the policy’s cash value provided additional peace of mind.
• Case Study #3 — Flexible Coverage for a Growing Medical Career: Dr. Evan needed funding to buy into a medical practice and chose AIG for its flexibility. Their term policy allowed collateral assignment without locking him into fixed terms. Evan met the loan terms and kept his death benefit intact for his family’s long-term protection.

Each of these cases shows how the best life insurance companies for collateral assignment don’t just check boxes—they offer real value when timing, flexibility, and loan approval matter most.

Whether you’re launching a business or expanding one, the right provider helps you move forward without risking your policy’s core protection.

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Top 10 Life Insurance Companies for Collateral Assignment

State Farm, Prudential, and AIG have the best life insurance for collateral assignment, with rates starting at $24 per month. See why we chose these top insurers here:

#1 – AIG: Top Overall Pick

Pros

• Lender-Approved Coverage: AIG life insurance offers permanent policies with cash value and guaranteed death benefits that lenders often accept for collateral.
• Flexible Policy Design: AIG supports custom structuring for complex loans, making it easier to meet assignment terms required by lenders and protect loan interests.
• Useful Riders Available: Optional riders, such as accelerated benefit or waiver of premium, help strengthen loan security and protect beneficiaries if the unexpected happens.

Cons

• Inconsistent Paperwork Support: Assistance with collateral assignment forms may vary by agent or office, leading to potential delays.
• Slower Underwriting Process: Applications for policies used in collateral agreements often take longer to finalize, especially for higher coverage amounts.

#2 – State Farm: Best for Flexible Terms

Pros

• Lender-Friendly Policies: Most banks accept State Farm life insurance for collateral due to its strong financial backing and reliable underwriting.
• Streamlined Assignment Process: Assigning a policy is straightforward, with minimal paperwork and support from licensed agents.
• Versatile Coverage Options: Offers both term and whole life policies that meet lender requirements, giving borrowers flexibility when securing personal or business loans.

Cons

• Limited Online Functionality: Managing the collateral assignment digitally can be inconvenient, as most tasks still require agent involvement.
• Fewer Custom Solutions: May lack advanced policy features or high-value options tailored to large business loans or complex estate plans.

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#3 – Transamerica: Best for Budget Final Expense

Pros

• Lender-Friendly Reputation: Transamerica Life Insurance Company is widely accepted for collateral assignment due to its simple policies and dependable death benefits.
• Simple and Fast Application: Transamerica simplifies the process, allowing borrowers to complete collateral assignment paperwork with fewer delays.
• Streamlined Policy Options: Simple, no-frills policies help borrowers and lenders align quickly on collateral terms with minimal confusion.

Cons

• Lower Brand Recognition for High-Value Loans: Transamerica lacks the prestige of top mutuals, which may affect appeal in high-net-worth loan cases.
• Limited Advanced Planning Options: Fewer tailored solutions may not suit borrowers with complex or high-value collateral needs.

#4 – Prudential: Best for Policy Flexibility

Pros

• Wide Policy Selection: Offers term, universal, indexed, and variable life insurance, giving borrowers multiple options that align with lender requirements for collateral assignment.
• Lender-Friendly Terms: Most financial institutions accept Prudential life insurance for collateral due to its strong underwriting, established process, and reliable payout structure.
• Strong Financial Ratings: Backed by high A.M. Best ratings, Prudential adds credibility in loan negotiations where life insurance is required as security.

Cons

• Longer Approval Times: Collateral assignment paperwork can move more slowly than digital-first providers, which may delay funding.
• Less Flexibility With Term Lengths: Some term policies may not align with long-term business loans, limiting options for extended financing needs.

#5 – Mutual of Omaha: Best for Quick Approval

Pros

• Quick Assignment Processing: Mutual of Omaha life insurance is ideal for fast collateral assignments, offering efficient underwriting and responsive support.
• Streamlined Paperwork: The company offers simple, lender-ready forms that make it easy to assign the policy as collateral with minimal administrative hurdles.
• Strong for Term-Based Loans: Mutual of Omaha’s term policies are ideal for short- to mid-term loans and are often accepted for quick collateral use.

Cons

• Limited Whole Life Options: Permanent coverage choices may not be as robust or flexible compared to companies that specialize in long-term or high-value loan support.
• Lacks Custom Collateral Planning: May not offer advanced structuring or policy features needed for large loan or business-related collateral assignments.

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#6 – Lincoln Financial: Best for Estate Coverage

Pros

• Highly Customizable Coverage: Flexible structures help match loan terms, especially when following the dos and don’ts of life insurance for proper collateral use.
• Expert Advisor Guidance: Offers strong agent support to help structure policies that meet lender requirements while preserving beneficiary protection.
• Advanced Policy Features: Optional riders, like waiver of premium and business protection riders, add an extra layer of financial safety when using life insurance as collateral.

Cons

• Lower Recognition Among Lenders: May not be top-of-mind for banks due to less underwriting flexibility, which can slow acceptance for larger or complex loans.
• Limited Digital Tools: Most collateral-related tasks must be handled manually, with few self-service options available online.

#7 – Northwestern Mutual: Best for High Net Worth

Pros

• Strong Fit for Large Loans: Northwestern Mutual Life Insurance offers whole life policies with strong cash value and returns, ideal for high-value collateral assignments.
• Exceptional Financial Stability: With one of the highest A.M. Best ratings, the company is a trusted name among lenders handling high-value or long-term collateral arrangements.
• Long-Term Coverage Reliability: Permanent policies are designed to stay in force for decades, which aligns well with extended loan durations and estate-backed lending needs.

Cons

• Agent-Driven Process: Collateral assignments and policy updates require coordination through a licensed agent, limiting digital self-service options.
• Less Practical for Small Loans: Policy structures and premiums may be too robust or costly for borrowers seeking coverage tied to smaller or short-term financing.

#8 – Guardian: Best for Dividend Growth

Pros

• Dividend-Earning Policies: Whole life plans may earn dividends, adding extra value for borrowers using the policy as high-level collateral.
• Flexible Policy Design: Guardian offers level and increasing benefits that align with what life insurance covers, protecting lenders and beneficiaries during the loan term.
• Experienced in Assignments: Guardian works closely with lenders and policyholders, helping streamline collateral assignment for large or complex loans.

Cons

• Limited Term Variety: Fewer short-term policy options can make it harder to match coverage to shorter business or personal loans.
• Paper-Based Assignment Process: Collateral assignments typically require manual paperwork and direct agent involvement, which can slow down processing.

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#9 – MassMutual: Best for Business Owners

Pros

• Tailored for Business Loans: Offers multiple types of life insurance—term, whole, and universal—designed to meet collateral assignment needs for commercial loans.
• Clear Assignment Process: Provides lender-approved assignment forms and step-by-step guidance, making it easier to use policies as loan security.
• Convertible Term Options: Many term plans allow conversion to permanent coverage, supporting borrowers who need long-term collateral for extended repayment periods.

Cons

• Complex Policy Design: Business-oriented plans often require advisor input to align with specific loan structures and collateral terms.
• Lengthy Setup Time: Underwriting and policy setup for collateral use may take longer, especially for high-value or business-related applications.

#10 – New York Life: Best for Long-Term Coverage

Pros

• Strong Fit for Long-Term Loans: New York Life Insurance offers permanent policies with steady cash value and death benefits, ideal for long-duration collateral assignments.
• Valuable Cash Growth: Whole life policies steadily build cash value over time, providing added security for lenders and future borrowing opportunities.
• Lender Confidence: Due to its financial strength and policy reliability, lenders frequently approve New York Life policies for collateral assignment without hesitation.

Cons

• Agent-Only Assignment Setup: Collateral assignment must be handled through a licensed agent, which limits self-service and online access.
• Fewer Short-Term Options: The company’s focus on long-term coverage means borrowers may find fewer term policies suited for short or mid-length loans.

Using Life Insurance as Collateral Safely

Choosing the best life insurance company for collateral assignment means more than finding the lowest premium. Look for providers that allow conditional assignment, offer strong financial ratings, and support lender-approved policies. State Farm, for example, offers whole life coverage from $75 per month, meeting loan needs and staying affordable long-term.

Prudential and AIG offer competitive options with flexible underwriting and strong payout histories, key for maintaining your death benefit during a loan term. With policies starting under $80 per month, these providers help you avoid lapses, delays, or term restrictions while protecting both your financing and your family’s coverage.

Stop overspending on life insurance. Use our tool to compare rates from top providers near you.

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