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Absolute Assignment

What does absolute assignment mean.

Absolute assignment refers to a policyholder transferring his or her ownership of a policy to another party. That transfer means that all of the coverage within that policy will now go to the newly named party. The original owner of the policy does not have to state his or her reasons for doing so nor does he or she need to stipulate any conditions for the transfer.

Insuranceopedia Explains Absolute Assignment

There are a number of reasons why a policyholder transfers all of their rights to a policy to another person or entity. They might think of it as a gift to someone else. It could be the sole means of paying off a loan. Even if the insured has now given up their rights to all of the claims and privileges, they are still responsible for payments for the policy. The new owner might have been asked by the original owner to pay the insurer after the transfer is completed, but if the newly named party fails to do so, the negligence will not be blamed on that person but on the original policyholder.

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Absolute Assignment of Life Insurance Policies

An absolute assignment transfers all ownership rights of a life insurance policy.

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•   1. What Is the Assignment of Insurance Benefits?
•   2. What Is a Life Insurance Assignment?
•   3. Does Life Insurance Count Towards the Two Million for Federal Estate Tax?

An absolute assignment of a life insurance policy involves transferring all rights and ownership decisions to another party. You could have one of several reasons for wanting to do this; for example, using the policy as collateral for a loan, or making a donation to your favorite charity at death. Making an absolute assignment is relatively simple as long as your life insurance policy allows it.

How Transfer of Ownership Works

Absolute assignment is akin to a transfer of ownership, in that you are giving all ownership rights to another party. Although you remain the insured under the contract, the new party can change the beneficiary (usually to itself), it can make decisions about investment options of a whole-life policy, and it can take any other action that does not jeopardize the policy's in-force status. You remain responsible for the premium payments, and you could be in breach of the assignment provisions if you don't pay them.

Collateral Loan Bank Assignment

Absolute assignment of life insurance is often done when a person applies for a loan. If the bank is concerned that the loan might not be repaid if you died, if might require a life policy with an absolute assignment to the bank. The bank names itself the beneficiary of the policy up to the amount of the loan balance. Any residual death benefit would go to your named beneficiary.

Financing a Charitable Gift

Another use of absolute assignment is to make a charitable gift. This approach is gaining in popularity.

Life insurance is often purchased to finance a charitable donation by the estate of a deceased individual. One drawback to this approach is that the entire gift goes through the estate and might incur probate delays and fees.

The use of an absolute assignment streamlines the process, as the charity can name itself the beneficiary of the policy. The charity can issue you a tax receipt for every premium, which you can deduct as a charitable contribution.

Absolute Assignment Legal Considerations

Insurance companies freely provide assignment forms that are straightforward and easy to fill out. Once an assignment is complete, a copy of the form should be filed with the insurance company.

The life insurance company may withhold part of its payout to any beneficiary -- including a newly designated one -- if a premium hasn't been fully paid, or because of other indebtedness. That might have legal ramifications for you and the assignee, in which the insurance company will take no part.

• Standard Life Insurance Co. of New York: Absolute Assignment Form
• Waypoint Partners: Assigning Your Life Insurance Policy
• Collateral Assignment Agreement

Philippe Lanctot started writing for business trade publications in 1990. He has contributed copy for the "Canadian Insurance Journal" and has been the co-author of text for life insurance company marketing guides. He holds a Bachelor of Science in mathematics from the University of Montreal with a minor in English.

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Home » Articles Library » 2 Ways to Transfer Ownership of a Life Insurance Policy

2 Ways to Transfer Ownership of a Life Insurance Policy

As property, policyowners can transfer their life insurance contracts to other persons or entities. A policyowner can transfer either all or only some of the “bundle of rights” that comprises a life insurance policy to almost any person or entity.

The two basic ways of making a lifetime transfer of a policy are: (1) the absolute assignment; and (2) the collateral assignment. An absolute assignment, as its name implies, transfers all the policyowner’s rights irrevocably. A collateral assignment, again as its name implies, assigns so much of the death benefit as necessary for as long as necessary to secure a lender’s rights. But no more of the proceeds will go to the lender than the amount of debt owed.

Requirements

The assignment does not have to be of any particular form (absent specific provisions in state law or the contract to the contrary). Because life insurance is treated as personal property, policyowner may transfer ownership rights, not only by many different types of documents, but also by many different actions. For example, if a person sells a business and the business owns a life insurance policy, the sale of all the assets of the business carries with it the personal property the business owned – including the life insurance.

Likewise, a property settlement in connection with a divorce may have the effect of transferring the ownership of life insurance on the life of one or the other (or both) spouse(s) even though no one ever uses the word “assignment” with regard to these transfers. But this type of transfer (where a clause in the divorce decree disposes of life insurance) is both very dangerous and very awkward. If a policyowner names his new spouse as beneficiary of the insurance proceeds and the insurer has no notice or knowledge of the divorce decree’s change, both spouses are likely to claim the proceeds. Furthermore, if the decree requires the policyowner spouse to maintain the policy for the benefit of his or her ex-spouse, the policyowner cannot obtain a policy loan-even to keep the policy in force through a premium loan.

Before either the absolute or collateral type of assignment or any other instance of a policy ownership transfer is valid, the policyowner must notify the insurer (and, where required by the terms of the contract, the insurer must consent to the assignment). Once notified in writing at the insurer’s home office, the insurer must honor the policyowner’s transfer—unless the terms of the contract itself forbid assignments. So if the insurer then disregards (by intention or neglect) the assignee’s rights and makes payment to someone else, the courts may force the insurer to make a second payment to the assignee. If the policyowner gives no notice to the insurer, it will be protected in a transaction initiated by a former owner. For instance, if the former owner applies for a policy loan and he has not given the insurer proper notice that he had assigned the policy, the insurer is protected in making that loan.

The insurer does not, however, have to verify the bona fides of the transaction between the policyowner and the transferee nor the validity of the transaction. In other words, the insurer is not accountable for the mental or legal capacity of the policyowner to make the assignment (unless it had knowledge that the policyowner was not legally competent to make it or there were irregularities in the assignment form).

Absolute Assignments

Policyowners use an absolute assignment in life insurance planning when the policyowner wants to sell or give away all of his or her rights under the contract. The goal might be to obtain valuable consideration, to save estate taxes, avoid creditors, or purely for love and affection and to assure the transferee of financial security. There are many common examples of sales and gifts: 

• A client might sell a policy on his life to his business.
• A business might sell a policy on an employee’s life to the employee or to the employee’s spouse or child or trust (or to a pension plan).
• A shareholder might sell a policy on his life to a new business associate.
• A client might give a policy on her life to her spouse.
• A client might give a policy on his life to his children or to a family trust.

Tax Implications

Both sales and gift transactions have important and sometimes unexpectedly expensive tax implications. Planners should thoroughly research before allowing any sale of a life insurance policy. Also, understand what should be considered before allowing a client to make a gift of a policy. A valid gift requires that the donor have contractual capacity and intent to make a voluntary gratuitous transfer and the gift must be delivered to and accepted by the donee (assignee).

Nontax Implications

Planners must be aware of the nontax implications of an absolute assignment in order to avoid them and/or alert the client to their potential effect. Some of these are: 

Although an absolute assignment itself may not per se change the interest of a revocable beneficiary, as a practical matter the new owner can immediately change the beneficiary and often makes that change almost simultaneously with the assignment. Some absolute assignment forms state that the new owner is automatically the primary policy beneficiary until the new owner makes a change to the beneficiary designation.

If the policyowner made an irrevocable beneficiary designation before making an absolute assignment of the policy, in most states the assignment will not defeat that designation (without the written consent of the beneficiary) and the transferee should be apprised of this fact.

Absolute assignments may put the policy and its proceeds beyond the claims of the  policyowner’s creditors, but planners should inform policyowner that—like diamonds—an absolute assignment is forever. There is a loss of both control and flexibility from the transferor’s viewpoint.

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WHAT IS ABSOLUTE ASSIGNMENT?

Absolute Assignment is a legal instrument that allows the owner of a life insurance policy or other valuable assets to transfer all rights and ownership of the asset to a designated assignee. This transfer of ownership is comprehensive and unrestricted, giving the assignee complete control and authority over the asset. Unlike conditional assignment, which may have specific conditions attached, absolute assignment represents an unqualified transfer of ownership..

Absolute assignment can be used not only in the context of life insurance but also for transferring ownership of other valuable assets such as real estate and securities. It involves a meticulous adherence to legal requirements and procedural details to ensure the validity and legality of the ownership transfer. Seeking guidance from legal and financial experts is essential to ensure a smooth and legally sound execution of the absolute assignment process..

When considering selling a life insurance policy, individuals have the option to engage in a life settlement, wherein the policy is sold to institutional buyers in the secondary market. This process involves applying to various licensed buyers who compete to offer the highest bid for the policy. An experienced life settlement broker can facilitate this auction-style bid process, ensuring that policy owners receive the best possible offer for their policies..

Welcome Funds is a nationally licensed life settlement broker that specializes in representing policy owners in the secondary market for life insurance. They engage in an auction bidding process to secure the highest offer from institutional buyers, providing professional representation and expert counsel throughout the sale of the life insurance policy..

To explore the eligibility of a life insurance policy for a potential life settlement, individuals can embark on a cost-free and commitment-free journey by engaging in a Life Settlement Qualification Process. This process includes a complimentary Personal Consultation & Appraisal, during which confidentiality is safeguarded. Interested individuals can complete a Quick Life Settlement Qualifier online or call a toll-free number to connect with a dedicated Client Care Advocate..

Overall, the combination of absolute assignment and the life settlement process provides individuals with a means to transfer ownership of valuable assets and explore options for selling their life insurance policies in a competitive market..

Complete our quick Life Settlement Qualifier or call us toll-free at 877.227.4484 to speak with a Client Care Advocate.

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• Absolute Assignment

What is Absolute Assignment in Life Insurance?

<lingo>In life insurance, the term absolute assignment refers to the transfer of all interest, rights, and ownership of an asset — in this case, the life insurance policy. This decision is irrevocable, which means it cannot be changed once it is in place. It also applies both to the present and in the future. For those who are purchasing a life insurance policy, it is important to look for a clause like this in the details and to understand what it means to use absolute assignment. In short, all rights and ownership of the policy are being given to another person, specifically listed in the policy.</lingo>

Absolute Assignment Clearly and Briefly Explained

There are numerous reasons why you may wish to pursue an absolute assignment. For example, it may be used in the process of providing collateral for a loan to a lender. In addition to this, some may elect to use this when you wish to donate the proceeds from your life insurance policy to a charity or award them to a specific purpose after your death.

<twitter>In life insurance, the term absolute assignment refers to the transfer of all interest, rights, and ownership of an asset — in this case, the life insurance policy. </twitter>

One way to look at absolute assignment is that it allows you to transfer ownership — all ownership — to another party. When you make this transfer, you remain covered under the life insurance policy. However, the new owner of the policy has the right to make changes to it. For example, they can change the beneficiary of the policy. Most often, this will be done to change the beneficiary of the life insurance policy to the new owner’s name. In addition, the new owner now has the ability to make all decisions regarding the underlying assets within the investment. The only thing that the new owner cannot do is to eliminate the coverage of the plan.

When absolute assignment occurs, you continue to make payments on it. One common use of this is when you are taking out a loan and the bank is concerned about your age or health. They may require you to take out a life insurance policy and assign absolute assignment. This would help cover the value of the loan should you die while it is in place.

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Absolute Assignment of a Life Insurance Policy

Absolute Assignment means complete Transfer of Rights. The person who transfers the rights is called the Assignor and the person to whom the rights are being transferred is called the Assignee.

The process of transferring rights of a Life Insurance Policy is called Assignment. There are 2 types of Assignment.

• Absolute Assignment
• Conditional Assignment

Hence Absolute Assignment means completely transferring whole and sole rights of the policy from the Assignor to the Assignee without any further terms and conditions applicable.

The process of assignment is complete only when the original Policy Document has been endorsed or a fresh Policy Document has been issued in favour of the Assignee.

Let’s take an example:

Rahul owns a Life Insurance policy of value Rs 5 lakhs. He would like to gift it to his best friend Ajay.

Thus, in that case, he would like to perform Absolute Assignment of the policy in Ajay’s name such that the death or maturity proceeds are directly paid to him. Rahul’s family members or nominee does not have any right on the policy money.

After the assignment is executed, Ajay becomes the absolute owner of the policy. If he wishes, he may again transfer it to someone else for any other reason. This type of Assignment without any further clauses attached to it is called Absolute Assignment.

Example in real life of Absolute Assignment happens in case of an Insurance Policy being taken by the employer as a perquisite for the employee. Once the policy is purchased, it is transferred to the employee’s name under Absolute Assignment clause. Hence the employee becomes the owner of the policy, but the employer pays for it till the end. Thus, instead of paying the employee cash, they purchase an insurance policy in their name and add it to their Annual Income Package.

Deepak Yohannan is the Founder &amp; CEO of MyInsuranceClub. He enjoys writing on Personal Finance and focusses on explaining the basic concepts of insurance in simple language.

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Absolute Assignment

According to today’s tax laws, when a policy is transferred down the family tree (the most typical scenarios are parent to child or grand-parent to grand-child) with no compensation for the transfer, this can happen tax free.

If you transfer your Whole Life policy to a third party, it will probably be considered a full disposition, and most likely will trigger a taxable event.

The definition of child is broad for tax purposes and can be applied in modified circumstances. It is recommended to consult your insurance advisor and a tax professional to confirm before taking any action.

The “Absolute Assignment” is a key component of the “ Cascading Life Insurance ” concept.

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absolute assignment

• A type of assignment where all rights and benefits related to a property or agreement are fully transferred, resulting in the original owner having no remaining stake or claim
• The life insurance policyholder decided to opt for an absolute assignment, effectively transferring all his benefits to his children.
• After the absolute assignment of the patent rights, the inventor no longer had any interest in the patent.
• By executing an absolute assignment, the tenant transferred all his rights and obligations of the lease to the new renter.
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Industry jargon and unfamiliar terminology can be confusing..

No insurance resource would be complete without a helpful menu of terms and concepts. This information-rich list will help you make sense of the solutions you are considering.

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Absolute Assignment

​The transfer of ownership and all policy rights from the existing policy owner to another person or entity. If there is an irrevocable beneficiary or collateral assignment, that person must consent to the assignment since he/she has an irrevocable vested interest in the policy. ​

Related Terms: Collateral Assignment

What is Absolute Assignment?

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How is the transfer of a policy's ownership done?

The transfer of a policy's owner is done through an Absolute Assignment. Absolute Assignment is the legal transfer of all rights and benefits of a policy from the current policy owner (Assignor) to the new policy owner (Assignee). You can transfer the rights on your life insurance policy to another person or institution for various reasons. This process is known as Assignment and is governed under the Policies of Assurance Act (Chapter 392).

What policies are assignable?

Endowment policies and whole life assurance policies are assignable. other types of insurance policies are generally non-assignable. ​​​​​​​, does the assignor have any rights after the assignment, in an absolute assignment of an insurance policy, the assignor retains no rights. all rights are transferred to the new policy owner (assignee). .

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Assign policy to new owner

An absolute Assignment is a transfer of ownership from the Assured (Assignor) to another person or institution (Assignee). The Assignee becomes the new owner of the policy and assumes full legal rights over the policy. All proceeds, including surrender, maturity and claims, will be payable to the Assignee.

You can assign the policy if

1. the policy

- is not using CPF/SRS monies for premium payments

- is not effected under trust

- is not used to be exempted from CPF Board's Home Protection Scheme (HPS)

- is allowed to be assigned under the plan

2. both Assignor and Assignee are

- of sound mind

- not bankrupt

- not under duress

3. The Assignor must be at least 18 years old. For policies issued on or after 1 March 2009, the Assignee must be at least 18 years old. For policies issued before 1 March 2009, the Assignee must be at least 21 years old.

Both the Assignor and Assignee must come to our Customer Service Centre at 1 Pickering Street, #01-01 Great Eastern Centre, with their NRIC.

If the assignment is done between spouses, or parent and child, or siblings, and relationship can be established by producing the marriage certificate or birth certificate, they need not be present at our Customer Service Centre.

Please complete the Absolute/Collateral Assignment form. Additional documents required are stated on the overleaf of the form.

Yes, you can assign to a company or institution.

Both the Assignor and Assignee must come to our Customer Service Centre at 1 Pickering Street, #01-01 Great Eastern Centre, with their NRIC (if the relationship between them is buyer and seller).

For an assignment to a company or institution, a company stamp is required on the assignment form.

No. Once absolutely assigned, the policy ownership will belong to the Assignee. However, the policy ownership can be transferred back to you provided the Assignee agrees to it. A new assignment will need to be done.

You can still assign the policy if the nomination made is a revocable nomination. The revocable nomination will be automatically revoked once the policy is assigned. If the policy has a trust nomination, the trust nomination will have to be revoked before you make an assignment.

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An absolute assignment is the transfer of a life policy to another person for various reasons and is governed under Policies of Assurance Act (Chapter 392). Once the policy is assigned, the assignor (policy owner) loses all rights to benefit under the policy. The assignee will receive all future correspondence on the policy. All future benefits and/or payment will be payable to the assignee.

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• Define: Absolute Assignment

Absolute Assignment :

1. A legal transfer of rights or ownership of a property or asset from one party (the assignor) to another party (the assignee) without any conditions or limitations.

2. In insurance, an absolute assignment refers to the transfer of the ownership of a life insurance policy or annuity contract from the policyholder to another individual or entity . This transfer is typically permanent and irrevocable, and the assignee becomes the new owner of the policy or contract, assuming all rights, benefits, and responsibilities associated with it.

3. In contract law , an absolute assignment refers to the complete transfer of contractual rights and obligations from one party to another, without any conditions or restrictions. This transfer is typically done through a written agreement or contract, and once the assignment is made, the assignee assumes all rights and liabilities under the original contract.

4. In finance, an absolute assignment refers to the transfer of a debt or loan obligation from one creditor to another, without any conditions or limitations. This transfer is typically done through a legal agreement, and the new creditor assumes all rights and responsibilities associated with the debt.

Overall, an absolute assignment involves the complete and unconditional transfer of rights, ownership, or obligations from one party to another, without any restrictions or limitations.

An absolute assignment is a legal transfer of all rights and interests in a property or asset from one party to another. This type of assignment is irrevocable and the assignor gives up all control and ownership of the property or asset. Once the assignment is made, the assignee becomes the new owner and has full rights to the property or asset. Absolute assignments are commonly used in insurance policies, where the policyholder transfers their rights to the benefits of the policy to another party.

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Q: What is an absolute assignment? A: An absolute assignment is a legal transfer of ownership of a life insurance policy from one person to another.

Q: Why would someone want to do an absolute assignment? A: There are several reasons why someone might want to do an absolute assignment, including transferring ownership of a policy to a trust, gifting a policy to a family member, or selling a policy to a third party.

Q: What is the difference between an absolute assignment and a collateral assignment? A: An absolute assignment transfers full ownership of a policy, while a collateral assignment only transfers a portion of the policy’s benefits as collateral for a loan.

Q: Can an absolute assignment be reversed? A: No, once an absolute assignment is completed, it cannot be reversed.

Q: What happens to the policyholder’s rights after an absolute assignment? A: The policyholder no longer has any rights or control over the policy after an absolute assignment is completed.

Q: What is the process for completing an absolute assignment? A: The process for completing an absolute assignment varies depending on the insurance company and the specific policy. Generally, it involves completing a form and submitting it to the insurance company along with any required documentation.

Q: Are there any tax implications of an absolute assignment? A: There may be tax implications of an absolute assignment, depending on the specific circumstances. It is recommended to consult with a tax professional for guidance.

Q: Can an absolute assignment be done for any type of life insurance policy? A: Yes, an absolute assignment can be done for any type of life insurance policy, including term, whole life, and universal life policies.

This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.

This glossary post was last updated: 29th March 2024.

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Our team of professionals are based in Alderley Edge, Cheshire. We offer clear, specialist legal advice in all matters relating to Family Law, Wills, Trusts, Probate, Lasting Power of Attorney and Court of Protection.

Organic & Biomolecular Chemistry

First total synthesis of asperilactone b. revision of absolute stereochemistry of asperilactones b and c..

The first total synthesis and absolute configuration assignment of asperilactone B (I) has been accomplished. Additionally, a revision of the absolute stereochemistry of asperilactone C has been done. The first total synthesis of the opposite enantiomer of asperilactone B (ent-I) has also been achieved, as well as C-7 epimers of both asperilactones B (8) and C (9).

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• Supplementary information ZIP (7622K)
• Supplementary information PDF (3655K)
• Crystal structure data CIF (129K)

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S. Djokić, G. Benedeković, J. Kesić, M. V. Rodić, M. Popsavin, V. Popsavin and J. Francuz, Org. Biomol. Chem. , 2024, Accepted Manuscript , DOI: 10.1039/D4OB00583J

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Sam rubin remembered: reporter who filled in for ktla legend on day he died pays tribute (guest column).

Scott Mantz says that Rubin, who died on Friday, threw him a lifeline when he needed one most.

By Scott Mantz

Scott Mantz

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Over the nine years that I’ve been contributing to KTLA -TV in Los Angeles, I’ve been asked the same question over and over again by people who recognized me from the channel: “What is Sam Rubin really like?” The short answer is simple: With Sam, what you saw was what you got. As exuberant, enthusiastic and charming as he was on camera, that’s exactly how he was in person too.

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Hollywood a-listers react to sam rubin's death: "your professionalism was unmatched", sam rubin, longtime ktla entertainment reporter and anchor, dies at 64.

It wasn’t until I started filling in for Sam on occasion that I began to truly appreciate how hard his job was and how much responsibility came with it.

By December 2015, I had already been a producer with Access Hollywood for about 15 years. I had some on-camera experience by that point but not a lot. So I was surprised when Sam called me up and asked me to fill in for him on a pretty important morning in the world of entertainment: the morning of the Golden Globes nominations announcement. It required a really early start since the nominations are announced just after 5 a.m. The KTLA Christmas party was the night before, and Sam really wanted to go that and also wanted the peace of mind of being able to celebrate with his KTLA family without having to worry about getting up so early the next day.

By that point, Sam was already a firmly established L.A. institution. After so many red carpet premieres, awards shows, and Oscar and Emmy preshows (with his amazing co-host, Jessica Holmes) — not to mention more celebrity interviews than anyone could count — he had earned a stellar reputation as a respected professional and a class act. So, more than anything, I was incredibly honored that he trusted me with such an important assignment.

The morning went super smoothly, thanks to the producers in the best entertainment news department I’ve ever worked with, not to mention the absolute graciousness of legendary morning anchors Frank Buckley, Jessica Holmes, Mark Kriski, Megan Henderson, Eric Spillman and Henry DiCarlo. I wrapped at 11, left the studio at 11:30, and just 20 minutes later, heard the news that Sam had passed away. I was in total shock. I couldn’t believe it. As I write this the following morning, I’m still in shock.

Like so many who knew Sam and who felt like they knew Sam, I have lost a dear friend.

Whenever I saw Sam, I would always greet him by saying, “There he is, the Godfather of Entertainment News,” and get a big smile from him in return. I will remember that smile, and I will also remember how supportive Sam was of me, particularly at a time when I needed it the most.

A few years ago, I was feeling pretty blue after experiencing a double-whammy of personal and professional upheaval, and that’s precisely when Sam and his amazing entertainment producer, Grace Mendoza, asked me to start contributing to KTLA on a more regular basis, usually once a week. That continued even during the pandemic lockdown (when everything shifted to virtual) and last year’s double strikes. And I can’t tell you how much it meant to me.

And Sam was gracious enough to recommend me for other gigs, most memorably in 2021, when the Skirball Cultural Center unveiled a brand new exhibition called “Star Trek: Exploring New Worlds,” which featured props, costumes and models from across Star Trek ’s 55-year history. He needed someone knowledgeable to program special screenings of classic TV episodes and movies, followed by hosted Q&A conversations with Star Trek actors and historians. Sam knew that I was a lifelong Trekker, so when they asked if he knew of anyone would could help, he immediately said, “I know the guy.” To this day, that is still one of the most rewarding professional and personal experiences I’ve ever had, and I have Sam to thank for it.

So, when people ask me, “What is Sam Rubin really like?” I always give the short answer I shared above but also make it a point to say that Sam was generous, and his generosity was unconditional. As anyone in this cutthroat business will tell you, that sort of generosity is incredibly rare. I never took it for granted, and I never will.

Moving forward, I have no idea what the entertainment news world will look like without Sam, nor do I know what my life will be like without Sam’s support and guidance. But every time I hear the “ding-ding-ding” music fanfare that starts the KTLA “Entertainment News” report, I will think of him. And I will miss him dearly.

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