Assignee

An absolute assignment — An absolute assignment transfers all ownership rights in the policy to another party, including the right to change beneficiaries, borrow against the cash value, surrender the policy, and choose settlement options. The assignee becomes the new policyowner. A collateral assignment transfers only the limited rights needed to secure a debt, such as the right to receive an amount equal to the outstanding loan. Absolute assignment is commonly used when a policy is gifted or ownership is otherwise completely transferred. Because an assignment can defeat beneficiary expectations, policyowners should give written notice to the insurer so the transfer is recorded and future elections are respected.

National insurance concept

The assignee receives full ownership rights, including the right to name and change the beneficiary — An absolute assignment transfers all ownership rights in the life insurance policy to the assignee, including the rights to change the beneficiary, borrow against or surrender the cash value, and control the contract. This is different from a collateral assignment, which transfers only enough rights to secure a debt, leaving the owner with control over the balance of the policy. Because the absolute assignee steps into the owner's shoes, the previous owner no longer holds the right to change the beneficiary, and no beneficiary consent is required for the transfer. The assignee becomes the new owner for all purposes, so any later beneficiary changes are directed by the assignee.

National insurance concept