Absolute Assignment

What Does Absolute Assignment Mean?

Absolute assignment refers to a policyholder transferring ownership of their policy to another party. This transfer means that all coverage under the policy will now be directed to the newly designated party. The original policyholder is not required to provide a reason for the transfer, nor must they specify any conditions for it.

Insuranceopedia Explains Absolute Assignment

There are various reasons why a policyholder may transfer all of their rights to a policy to another person or entity. They might view it as a gift to someone else, or it could serve as the primary means of paying off a loan. Even though the insured has relinquished all claims and privileges associated with the policy, they remain responsible for making payments. The new owner may be asked by the original policyholder to make the payments to the insurer after the transfer, but if the new owner fails to do so, the responsibility for non-payment will fall on the original policyholder, not the new owner.