What is meant by Absolute Assignment in an insurance context?

Absolute Assignment refers to the process where the policyholder transfers all rights of ownership of an insurance policy to another entity or individual. This complete transfer means that the new owner gains full control over the policy, including the ability to change beneficiaries, take loans against the policy, or even cash it in if it has a cash value.

This contrasts with other forms of assignment, such as collateral assignments, where rights are retained by the original owner or only certain rights are transferred. In an absolute assignment, the original owner effectively relinquishes all claims and control over the policy, making it a significant decision for policyholders. This understanding of ownership rights is crucial for those navigating insurance contracts and planning their estate or financial management strategies.