State RegulationsMI specificDifficulty 1/5
When a Michigan policyowner transfers all ownership rights in a life policy through an absolute assignment, the transfer conveys:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Under the Michigan Insurance Code (Insurance Code of 1956), an absolute assignment transfers the entire ownership interest in the policy. The assignee steps into the policyowner's position and holds the full bundle of ownership rights — changing beneficiaries, selecting settlement options, borrowing, surrendering, and reassigning. This distinguishes an absolute assignment from a collateral assignment, which pledges the policy only as security for a specific debt.
Why the other options are wrong
- B) Receiving the death benefit alone describes a limited or collateral interest; an absolute assignment transfers all ownership rights.
- C) The premium obligation follows ownership to the assignee, but the defining feature of the transfer is the bundle of rights, not the duty to pay.
- D) The insured's written consent is not a general requirement for assigning an existing policy; the policyowner's assignment itself is effective.
Memory hook
Absolute assignment hands over the whole toolbox.