A policyowner ABSOLUTELY assigns her whole life policy to her adult son. Under the California life insurance assignment rules, which statement BEST describes the consequence?

Explanation

Under California Insurance Code §10130 and §10170 and standard policy provisions, an ABSOLUTE assignment is a complete transfer of all ownership rights in the policy from the assignor to the assignee. The assignee becomes the new owner and may exercise every right: change the beneficiary, take policy loans, surrender for cash, elect dividend options, and so forth. A COLLATERAL assignment, by contrast, transfers only a limited interest (typically to a creditor as security for a debt) and reverts to the original owner when the debt is paid — so the description that transfers only the right to receive the death benefit while the original owner keeps cash value, loan and beneficiary rights is a partial or collateral assignment, not an absolute one. The insurer normally requires written notice but is not itself a party to the assignment, so requiring the insurer to join and countersign misstates the insurer's role (notice only). And limiting absolute assignment to spouses or registered domestic partners invents a family-only insurable-interest restriction that does not exist; any competent adult can be an assignee.