Practice Quiz

Health and Life Insurance

Category - Annuities & Policies

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When Eric and his wife divorced, Eric wanted to give the life insurance policy he has on his wife to their children, relinquishing all control of the policy. What type of assignment would Eric probably use to make this work?
  1. Voluntary assignment
  2. Collateral assignment
  3. Conditional assignment
  4. Partial assignment
Explanation
Answer: A - Eric would probably use a voluntary assignment to relinquish his control of the life insurance policy. Voluntary assignment happens when a policy owner sells or gifts the policy by assigning all rights to the assignee. The voluntary assignment can be called absolute or complete assignment because all rights are usually turned over to the assignee. The rights turned over include the use of any cash value from the policy.
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