What is the term for the transfer of rights of policy ownership?

What is the term for the transfer of rights of policy ownership?

• A. Contingent beneficiary
• B. Primary beneficiary
• C. Secondary beneficiary
• D. Assignment

Answer: (D)

Assignment is the transfer of ownership rights in a life insurance policy. When an assignment occurs, a new person becomes the policy owner and gains full control over the policy—able to change beneficiaries, borrow against the cash value, surrender the policy, or name someone else as the beneficiary. There are two common forms: absolute assignment, which transfers all ownership rights to another person, and collateral assignment, which temporarily gives a lender a claim to those rights to secure a loan while the original owner retains some control. Beneficiaries (primary or contingent) are about who receives the death benefit, not who owns the policy, so they describe designations for payout rather than ownership transfers.

Assignment is the transfer of ownership rights in a life insurance policy. When an assignment occurs, a new person becomes the policy owner and gains full control over the policy—able to change beneficiaries, borrow against the cash value, surrender the policy, or name someone else as the beneficiary. There are two common forms: absolute assignment, which transfers all ownership rights to another person, and collateral assignment, which temporarily gives a lender a claim to those rights to secure a loan while the original owner retains some control. Beneficiaries (primary or contingent) are about who receives the death benefit, not who owns the policy, so they describe designations for payout rather than ownership transfers.