Life Policy ProvisionsQuestion 170 of 315
When a life insurance policyowner makes an absolute assignment of the policy, what is the result?
a.Only the death benefit is transferred; ownership stays with the original owner
b.The assignment is voided after one year
c.The insurer assumes ownership for collateral purposes only
d.All ownership rights are permanently transferred to the assignee
Explanation
An absolute assignment is a full and permanent transfer of all ownership rights in the policy to the assignee. A collateral assignment, by contrast, transfers only enough rights to secure a debt, with remaining benefits reverting to the policyowner once the debt is paid.
Law Reference: Cal. Ins. Code §10130Practice all 315 questions free — no signup required.
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