Which type of assignment occurs when ownership of a life insurance policy is transferred to another person?

The concept of absolute assignment refers to the complete transfer of ownership of a life insurance policy from one party to another. When a policy is absolutely assigned, the new owner gains full rights to the policy, including the ability to change the beneficiary, make premium payments, and ultimately receive the death benefit when the insured individual passes away. This type of assignment is irreversible, meaning that once the ownership has been transferred, the original policyholder no longer retains any rights to the policy.

In contrast, other forms of assignments, such as temporary and conditional assignments, do not involve a full transfer of ownership. A temporary assignment typically grants limited rights for a specific duration or purpose, while a conditional assignment may involve stipulations that must be met before the assignment takes effect or is valid. A permanent assignment could suggest a lasting transfer, but it may not delineate ownership rights in the same way that absolute assignment does. Therefore, absolute assignment is the correct term to describe the complete transfer of a life insurance policy to another person.