Definition - What does Lien mean?
A lien, in the context of insurance, is a legal claim that an auto insurance company, health care provider, or health insurance company has over settlement claims after paying the injured party’s bills.
In general, a lien is the security interest that a creditor has against a certain property. It is attached to the title of the property, say a house or a car, and remains so until the lien is paid.
Insuranceopedia explains Lien
Generally, a lien is a legal claim or a financial interest over a property that belongs to a third party. The person who has a claim against another’s property is called a lienholder. A lienholder may be a creditor who granted a loan for the purchase of the property, or a contractor who provided services for its completion. The government may also have a lien over the property of another, such as in a case where the owner of the property fails to pay real estate taxes. In most cases, the lienholder is not in possession of the asset or property.
In insurance, a third party who has paid the bills or claims of an injured party may file a case to ask the court to order the satisfaction of a lien. The court will attach a lien to a personal property of the insured to satisfy his liabilities to the insurance company. A lien is attached until it is paid completely. Once it is paid, waived, or lifted, a lien release happens, and the property becomes free and available for purchase.
How Well Do You Know Your Life Insurance?
The more you know about life insurance, the better prepared you are to find the best coverage for you.
Whether you're just starting to look into life insurance coverage or you've carried a policy for years, there's always something to learn.