State RegulationsFL specificDifficulty 3/5
Which statement about the effect of an absolute assignment of a Florida life policy is correct?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
Under Chapter 627, Florida Statutes, an absolute assignment transfers the entire ownership interest: the assignee becomes the policyowner, holding rights such as loans, beneficiary changes, and surrender, while the insured - whose life is covered - stays the same. The policy does not terminate; it simply has a new owner, which is why absolute assignments are used in sales of policies rather than debt security.
Why the other options are wrong
- A) In an absolute assignment the original owner gives up control; retaining control would be a collateral assignment's partial transfer.
- B) The policy continues in force under the new owner; it does not lapse.
- D) The insured never changes through assignment; only the policy's ownership does.
Memory hook
Absolute assignment: new owner, same insured.