In an Absolute Assignment, who owns the life insurance policy?

In an Absolute Assignment, the client purchasing the policy is recognized as the new owner of the life insurance policy. This means that the client has the authority to make decisions regarding the policy, including the ability to change beneficiaries, borrow against the policy, or even surrender it. The absolute assignment effectively transfers all rights and ownership of the policy from the previous policyholder to the new one, which is typically the person or entity that initiated the assignment process. This process is often utilized for estate planning or to ensure that the policy aligns with the current financial or personal goals of the policyholder.

The role of the insured person, the insurance company, and the beneficiaries differs from that of the policy owner. While the insured person is the individual whose life is covered by the policy, they may not have any claim to ownership in the case of an Absolute Assignment. The insurance company acts as the entity that issues the policy and provides coverage but does not hold ownership rights. Beneficiaries, on the other hand, are entitled to the death benefit when the insured passes away, but they do not own the policy. Thus, recognizing the policy owner in the context of an Absolute Assignment is crucial for understanding how life insurance policies are managed and controlled.