What is absolute assignment in the context of insurance policies?

Absolute assignment refers to a complete and permanent transfer of ownership of an insurance policy from one party (the assignor) to another party (the assignee). This process allows the assignee to have full control over the policy, which includes the ability to make changes to the policy, designate beneficiaries, or even surrender the policy for its cash value.

In this arrangement, the assignor relinquishes all rights and claims to the policy, effectively making the assignee the new owner. This can be particularly important in situations involving estate planning or securing loans, as it allows for more flexibility in how policy benefits and ownership are utilized.

While temporary transfers or partial ownership transfers may occur in certain contexts, they do not suffice to grant the new party full authority or ownership of the policy as absolute assignment does. A transfer limited to certain benefits would not equate to a complete ownership change, and thus, these notions differ significantly from the concept of absolute assignment.