How can total ownership of a life insurance policy be fully transferred?

The correct answer is absolute assignment. This process allows the policyholder to transfer all rights and ownership of a life insurance policy to another individual or entity. With absolute assignment, the new owner gains complete control over the policy, which includes the ability to make changes, access cash value, or designate beneficiaries. This is an important feature because it essentially relinquishes all rights from the original owner, allowing for seamless ownership transfer.

Other options provide different functionalities regarding a life insurance policy. For example, collateral assignment allows for temporary transfer of the policy’s benefits to secure a loan, but it does not convey total ownership as absolute assignment does. Total surrender refers to the cancellation of the policy, which results in the owner receiving any accumulated cash value, effectively terminating their rights. Partial surrender permits the policyholder to withdraw a portion of the cash value while keeping the policy active, but it does not involve transferring ownership.